Cost Prediction and Software Project Management

This chapter reviews the background and extent of the software project cost prediction problem. Given the importance of the topic, there has been a great deal of research activity over the past 40 years, most of which has focused on developing formal cost prediction systems. The problem is that presently there is limited evidence to suggest formal methods outperform experts, therefore detailed consideration is given to the available empirical evidence concerning expert performance. This shows that software professionals tend to be biased (optimistic) and over-confident, and there are a number of deep cognitive biases which help us understand why this is so. Finally, the chapter describes how this might best be tackled through a range of simple, practical and evidence-based methods.