I think neither solution is the correct one. I find that in the case of the second solution: "thorough planning" you get a bunch of people fabricating estimate

I think neither solution is the correct one. I find that in the case of the second solution: "thorough planning" you get a bunch of people fabricating estimates of estimates with padding or not padding or trying to estimate a bunch of unforeseen events that are too far ahead to get an accurate handle on. Sure, the second is likely to be much more accurate just because the second is likely to be much, much longer but I have never given one of these estimates without it being followed up by immense disappointment by business with a desire to strong arm me into something shorter. This demonstrates a fundamental issue with the topic. Its not about the estimate at all. I think the problem with estimates is their finality and assumption of correctness. I figure once you're in the developer-years category you might as well iterate the estimate a bit to get a better sense of it. Error bars should be translated into risk for the business decision. Too often I see people claim to be making "rational, facts based" decisions on estimates (beyond 1 year+) are complete codshit. This is not rational decision making. These decisions should be about risk management assuming failure as opposed to thinking you can slot year+ development estimates together. I think very often the desire to lock down development estimates into "rational fact" are business decisions of risk masquerading as technical developer decisions of fact. I have yet to see a situation where we deliver an estimate that blows a business decision out of the water where the business just backs down. It just learns to ask a different question and gets the answer it wants out of that.