A contingency estimation model for software projects

A contingency estimation model for software development projects is presented. The proposed model considers the estimated cost and the risk of software projects to estimate contingency resources; hence, contingency estimates are correlated to the cost and risk of software projects. The model uses a generic probabilistic representation of the estimated cost; hence, it can be deployed with any project development environment and provides a flexible choice to software managers. Furthermore, the proposed model considers the risk tolerance of software organizations to estimate the contingency and helps to abate the maximum impacts of risk events within the risk tolerance. The proposed model is scalable to a portfolio of software projects. The model produces sub-additive contingency estimates which is essential to optimize a software project or a portfolio of software projects. The results of a case-study show that the contingency estimates are comparable with the actual contingency resources needed for the development of real software development projects. (C) 2012 Elsevier Ltd. APM and IPMA. All rights reserved.