December 14

You’re the experts, why can’t you give me an estimate up front?

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In this article, I’ll look to expand on what was covered in my previous post How much will it cost to build my app? Which you might also find really useful. Think of this as a companion article.

So tell me, how are things are going with your research?

Frankly, I’m feeling frustrated. I can’t find a software development company who is prepared to tell me, up front, how much my App is going to cost?

Ok, we get that, you are not alone. This is a perfectly natural emotion and virtually every client we’ve ever dealt with struggles to get their heads around this.

But the fact that you’re not getting the answers you want should not be viewed as a negative. This really just means you’ve done a good job finding the right professionals to talk to and you’re dealing with companies who know what they’re doing and have your best interests at heart.

It doesn’t feel that way though, so why do you say that?

Let me ask you a question; what’s more important to you, getting good advice and forming realistic expectations based on that advice? Or letting someone tell you what they think you want to hear and setting wildly unrealistic expectations as a result?

There is nothing more destructive to a business relationship than setting false expectations that cannot possibly be backed up in reality. After all is there really any value in being given a meaningless number just for the sake of it?

There’s another major problem with this too. What if someone is looking for funding based on this estimate? Whether it’s a private or institutional investor, friend or family member, no investor appreciates having to pitch in more funds than they anticipated. It reflects badly on everyone.

Here’s the thing to keep in mind, no one wins by being fed a meaningless number upfront. The software developer doesn’t win and you as the client certainly don’t win.

Ok, I get all that but I still don’t get why. Why can’t I get a cost estimate upfront?

We’re going to unpack that in the rest of this article but before we do, let me ask you this; how much does it cost to build a house?

If your first thought was ‘I have no idea, it depends on how big the house is, where it’s located, how many rooms it has, or a double garage, or a pool’ then you’ll already have a good idea of why it’s impossible for any software developer to give you a meaningful estimate of what your Application might cost to build upfront.

Go on…

Even in the early stages of the project you very likely have a great idea of the broad functionality (stuff that your App can do) that you want to see in your Application. You might also have a solid understanding of your target user and you might even have done some early stage branding work to give your idea a look and feel. All of this is fantastic and will go a long way towards saving you time when you start working with a team of professional software developers. But here’s the thing, what we and virtually all development companies have experienced is how much things change once you move into the first real stage of software development; the scoping process.

During scoping, you might work with a team that looks something like this;

  • project manager – to take overall control of the process of building your Application
  • business analyst – to help you understand how the Application might reflect your business model
  • senior developer – to make sure we can achieve what you want using current technology
  • UX/UI designer – to make sure your Application provides a wonderful experience and that your users can find what they want quickly

The actual make-up of a scoping team will vary from company to company but the good ones will cover all of the elements that I outline above. In fact, you should make a point of ensuring whomever you choose to do your work, covers all of these areas. This is best practice and is essential for a successful outcome.

Regardless of what the actual team looks like, you can bet they will have a vast amount of experience taking fantastic concepts and turning them into great products. Invariably they will come up with new ideas and ways you can achieve your goals and make suggestions that you hadn’t thought of after all, that’s their job and they do it day in, day out. During scoping, all ideas will be put on the table for consideration and that’s a positive thing, you definitely want that.

That sounds really exciting but what does it have to do with cost estimates?

Well, here’s the thing. Given everything we’ve just looked at I’m sure it will come as no great surprise to learn that, once you spend a couple of weeks with these professionals really unpacking your concept and drilling into the details, the early stage idea you started with at the beginning of the scoping process will look quite different by the end of it.

In other words, to continue the house analogy, you might have come into it thinking you were building a two story townhouse with a pool but you ended up realising you actually want a bungalow!

And this is exactly how it should be, it’s a healthy and normal part of the process of fleshing out and organically maturing your idea.

But it’s also at the foundation of why it is so very difficult to give cost estimates up front.

We truly get why this can be frustrating but you can understand why, based on this process, it would be foolish and in fact impossible for any reputable software development company to give a meaningful cost estimate before any scoping has been done and why, in fact, it does you a disservice.

As I mentioned at the top of the article, there is nothing more destructive to a business relationship and more damaging to the prospects of a successful project than setting false expectations that cannot possibly be backed up in reality.

OK, I understand where you’re coming from but someone has offered to give me costs up front. Given everything we just unpacked, can I take that at face value?

If someone is prepared to give you an estimate before scoping and especially if you’re looking for funding based on this number you might want to build in a buffer of +/- 80%. That’s right, the actual cost of building your application could be as much as 80% more than was indicated to you before any scoping work has been done! This is based on a well known and accepted principle called the ‘Cone of Uncertainty’ and it’s very important that you know about this especially if you’re discussing potential costs with a third party. Maybe an investor or other funding source.

Now, there are companies that will give you a pre scope estimate based on broad categorisations. For example; a small, medium or large project. But the good ones will make the cost range broad to take into consideration the Cone of Uncertainty principle. They should also make a point of explaining that any pre scoping cost estimate is very much an uncertain number. You might want to think of it as a guesstimate.

 

 

Thanks for the chat, any final words of advice?

Yes, one last thing. We would caution you to be very wary indeed of any development company that is prepared to give you a firm cost before any scoping work has been undertaken. If you have already been given a quote it would be prudent and sensible to ask the service provider exactly what they based that quote on and be careful, there are plenty of rogues out there!

But, and it’s a big but, if and only if, you have already gone through the scoping process this puts you in a very different position. In this scenario there is certainly merit in validating the costs you’ve been given for a set number of weeks of development. It’s also good practice to check the market and get a feel for what other developers might charge for the same number of weeks.

If you’ve done your scoping work, we have created a simple cost comparison calculator tool that you can use to compare our costs with anyone else you might be looking at. Hopefully this can act as a useful benchmark for you.

Access the tool here

Good luck with your project!


Tags

application, build software, building an application, cost, estimate, geekseat, new application, new product, new software


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