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Several studies suggest that uncertainty assessments of software development costs are strongly biased toward overconfidence, i.e., that software cost estimates typically are believed to be more accurate than they really are. This overconfidence may lead to poor project planning. As a means of improving cost uncertainty assessments, we provide evidence-based guidelines for how to assess software development cost uncertainty, based on results from relevant empirical studies. The general guidelines provided are: 1) Do not rely solely on unaided, intuition-based uncertainty assessment processes, 2) do not replace expert judgment with formal uncertainty assessment models, 3) apply structured and explicit judgment-based processes, 4) apply strategies based on an outside view of the project, 5) combine uncertainty assessments from different sources through group work, not through mechanical combination, 6) use motivational mechanisms with care and only if greater effort is likely to lead to improved assessments, and 7) frame the assessment problem to fit the structure of the relevant uncertainty information and the assessment process. These guidelines are preliminary and should be updated in response to new evidence.
Date of Publication: Nov. 2005