2025-09-26 06:05:06
💰 Why accurate software development cost estimation matters
A McKinsey study of 5,400 IT projects revealed a hard truth: budgets over $15M suffer an average 45% cost overrun, 7% schedule overrun, and deliver only 56% of expected value.
The difference between CTOs who consistently deliver and those who struggle isn’t luck — it’s the ability to estimate costs with discipline and precision.
💡 Keys to better estimation:
🔹 Define scope by business outcomes, not just features.
🔹 Factor in non-functional requirements (availability, security, compliance).
🔹 Account for integrations, QA, and DevOps costs upfront.
🔹 Use both top-down and bottom-up estimation to avoid blind spots.
🔹 Build realistic capacity models that reflect team ramp-up and productivity.
Accurate estimation transforms guesswork into a strategic advantage — protecting budgets, meeting deadlines, and building stakeholder trust.
Want to estimate like a pro CTO? Explore frameworks and real-world insights in our full guide HERE 👈🏻
A McKinsey study of 5,400 IT projects revealed a hard truth: budgets over $15M suffer an average 45% cost overrun, 7% schedule overrun, and deliver only 56% of expected value.
The difference between CTOs who consistently deliver and those who struggle isn’t luck — it’s the ability to estimate costs with discipline and precision.
💡 Keys to better estimation:
🔹 Define scope by business outcomes, not just features.
🔹 Factor in non-functional requirements (availability, security, compliance).
🔹 Account for integrations, QA, and DevOps costs upfront.
🔹 Use both top-down and bottom-up estimation to avoid blind spots.
🔹 Build realistic capacity models that reflect team ramp-up and productivity.
Accurate estimation transforms guesswork into a strategic advantage — protecting budgets, meeting deadlines, and building stakeholder trust.
Want to estimate like a pro CTO? Explore frameworks and real-world insights in our full guide HERE 👈🏻