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Estimation for software projects is, by nature, a high‐risk endeavor because every software project is unique. In contrast to replication in construction and manufacturing, software replication is a trivial process that can be accomplished with very little effort. Every software project thus involves some degree of novelty and innovation. In addition, a software project is rarely conducted under identical circumstances and environmental factors as previous projects. Novelty, innovation, changing circumstances, and different environmental factors make every software project different from every other software project; these factors also make it difficult to provide accurate estimates for software projects. This article describes some widely used estimation methods, points out how estimation risk can be dealt with when using these methods, and provides a format for recording and communicating estimates that emphasizes the risk factors in an estimate.

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