Software Estimation Without Guessing

Case: Developing a Fixed-Price Bid

The poster child for estimation is the development of a bid in response to a request for proposals (RFP), so let’s look at this situation first. A potential customer waves a requirements document and says, “I want to buy one of these; what will you charge me for it?” A bunch of other people go off between a rock and a hard place to figure out an answer to this question. Each wants to charge as much as the customer is willing to pay, but just low enough that the customer chooses their proposal instead of a competitor’s. Most importantly, they don’t want to bid so low that they can’t make a profit. That’s the estimation part of this game in a nutshell, though there’s certainly more to this game than estimation. ...