Estimate Uncertainties

During initial decomposition, a developer may not have the full scope of information required to make an absolutely accurate estimate. In order to solve that problem, an estimate is provided with uncertainties that account for particular assumptions made by a developer.

Uncertainties usually vary based on the stage of the project’s business requirements at completion.

Here is a typical breakdown:

• Low uncertainty: The estimate is very accurate, and the range of possible outcomes is between 0.8x to 1.25x of the provided value
• Medium uncertainty: The estimate is provided with medium accuracy, and the range of possible outcomes can be between 0.67x to 1.5x of the provided value
• High uncertainty: The estimate is provided with a very low accuracy, and the range of possible outcomes is anywhere between 0.5x to 2.0x of the provided value

It is recommended to take an estimated value with the standard deviation based on minimum, maximum, and realistic probability (e.g., 75%). To lower the estimate, you should work with a developer to provide more detailed business requirements.