Estimating software project effort for manufacturing firms

• Product managers encounter guesswork and subjective judgment-related problems.
• This study adopts ERP projects as an empirical database.
• This work presents feasible models to estimate the person-hour of an ERP system.
• The resulting model enables sales departments to promptly react for quotation.

Since the software industry significantly differs from traditional manufacturing in numerous ways, the development effort of software products originate mainly from human resources. In particular, enterprise resource planning (ERP) software is a virtual intelligence and customer service-oriented product. Software developers are thus concerned with how to estimate ERP project effort during the developmental stage. Despite significant advances in procedures that facilitate project management, product managers in the software industry still encounter guesswork and subjective judgment-related problems, frequently resulting in inaccurate estimates. No concrete functional relationship exists between effort estimation and the design requirements of ERP system development. Companies can thus lose their market competitiveness during the marketing phase of attracting customers owing to inefficient and ineffective responses. In addition to reviewing pertinent literature on estimation approaches, this work adopts information system projects developed by the primary Taiwan-based ERP solutions provider as an empirical database. Furthermore, based on analysis of recent ERP software projects, this work presents a feasible estimation model to satisfactorily estimate the person-hour of an ERP system development project efficiently. Based on systematic modeling, the proposed estimation model enables project decision makers or sales departments to react immediately to preliminary project cost with rate per person-hour, ultimately increasing their decision making quality, estimation efficiency and accuracy.