1. The Overconfidence-Bias
Overestimating yourself is a thinking error that we often encounter in app development as well as in everyday life. We use an app or other well-known software and think "I can do that much better! This misconception happens not only to our customers, but also to ourselves, especially when it comes to the exact estimation of project costs, duration or the potential success of digital products and services.
Examples of overconfidence in software projects
Quite often we receive requests for app development with statements like: "I know how to make e.g. Facebook or Instagram much better, you would only have to add this or that and not collect data. Please give me a price on how expensive this better version of Facebook will be".
Many people probably don't realize that Facebook has written more than 60 million lines of code and that a functioning platform requires a very large number of users in order to offer any added value in the context of the community.
Not only our customers overestimate their knowledge and skills, but also we as project managers, software developers and design specialists suffer from this phenomenon from time to time. Especially when it comes to realistically estimating the development time for a new software project, we often fall into the trap of assuming that all work can be done efficiently and effectively, instead of assuming the realistic case that unpredictable challenges arise in virtually every project, which then require more time than expected.
In the case of effort estimation, in addition to the overconfidence effect, there is also the "incentive-superresponse tendency", i.e. the tendency to react to incentive systems and thereby maximize personal benefit. The chances of a new order are perceived to be higher with a tighter estimate than if we include a large reserve for unforeseen events. In the worst case, this can lead to disappointment on both sides. For the development team, it will lead to planning changes and discussions; from the customer's point of view, it can lead to delays and additional costs, i.e. a poor customer experience.
Possibilities to reduce the Overconfidence-Effect:
Assume the pessimistic rather than the optimistic scenario.
Diversity: Different people estimate things differently. The thinking error can often be avoided if one has one's own assumptions validated by other people. In the best case, without communicating one's own conclusion in advance.
Make the hypotheses on which the assumptions are based explicit and test them seriously with clear quantitative and qualitative goals and metrics.
As a customer, you should not put pressure on a seriously prepared effort estimate of the development team. Why should someone estimate much higher than necessary? The competition in the market is too big for anyone to afford unrealistically high estimates. Our experience shows that heavily negotiated prices/estimates usually end up back at the original price at the end of the project anyway.
Include a reserve for contingencies in the budget to get a realistic picture of the costs.