- Why is a custom web project estimation always difficult?
- The main challenges for making an accurate web development estimate
- How do software development companies solve these challenges
- How to estimate a web development project - main tactics
- How to make sure your web application development cost estimation is realistic?
Table of contents
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Why is a custom web project estimation always difficult?
How much does web development cost? This is a pretty popular question asked equally frequently by both startup initiators and mature companies owners. However, it hasn’t an one-for-all answer. The matter is that each of the web development projects is pretty unique, each of them comes with some novelty and innovation so the developers have to face new and new challenges over and over again.
Still, there are some factors that affect the website development cost, and they, fortunately, are the same for all web projects without exception. Let’s dwell on them in more detail.
- Industry. The cost to develop the solutions for different industries is different as well. For example, telehealth projects are more expensive compared to eCommerce ones. But the price range differs significantly even within the same industry. For instance, the cost to develop a marketplace is approximately two times higher than the cost to create an eCommerce website with a basic set of features.
- Features set. The cost to create a web app also changes depending on the complexity and the number of features you have to create. The more features you need to build and the more complex they are, the more development time should be spent.
- Design complexity. Creating a fully custom design aligned with your business identity and fitting the UI/UX of your future solution has never been easy. That’s why the UI/UX design complexity and customization also affect the final price to build your product.
- The location of the development team. As you know, the hourly rates of software developers directly depend on their location. While the average web development price per hour is $100 in the US, a service of the same quality will cost $40-50 in other countries.
The main challenges for making an accurate web development estimate
In addition to the factors that directly affect the web development time estimation and the final price, there are also some issues that make an accurate cost prediction even more challenging.
- Vague requirements. Indeed, vague requirements are the kind of “standard” for web development. Most customers have only an idea of what do they want to get. Surely, gathering clear requirements at this stage is impossible, and here is where the job of the software development vendor begins - the development company should proceed with gathering, explaining, and aligning the requirements until they become ultimately clear to all the decision-makers and the customer themselves.
- Multiple decision-makers. A web development project estimator never works alone. The team usually consists of researchers, business analysts, and tech leads to create a holistic picture and come up with an as accurate estimate as possible. But in the case the team is unaligned and uncollaborative, there is a risk to get an almost random estimate.
- Lack of expertise. Sometimes the development vendor may lack the expertise to evaluate your project right. The correct approach, in this case, is to hire a third-party specialist to help make an estimate, taking the specifics of the chosen technology into account.
- Miscommunication and misunderstanding. These are evergreen challenges relevant not only for the web project estimation process but for software development outsourcing as a strategy. Fortunately, it can be solved by establishing clear communication practices, promoting transparency, and encouraging the customer to control the project from the very beginning.
How do software development companies solve these challenges
The challenges above are pretty serious when it comes to the need for an unambiguous estimate. While there are effective practices to solve them, some of the development companies may follow less transparent approaches to retain the customer, engage them in the development process, and leave with no other choice than to move on.
Below are some of the ways to manipulate the development cost and product estimate.
- Suggest Agile development. Agile can be an ultimately effective development methodology, but there is an essential condition - it should suit the project from the very beginning. Some simple projects that are easy to estimate need an old and proven Waterfall, while agility will only harm them. So, ask the vendor to prove and explain the need for Agile, especially when you have a small project that is going to be developed according to the Fixed Price contract.
- Forget to clarify that this is MVP’s price - not the final product’s. This is a big trap that business owners with no software development experience can get into. As a rule, the development vendors estimate the cost to build a Minimum Viable Product, since its set of features is predictable and already approved. The cost of a final product is usually two-three times higher than the price of a Minimum Viable one.
- Make a rough estimate with a great margin. When lack of expertise meets miscommunication and misunderstanding, there is a chance of getting a significantly overpriced estimate. A greater margin is an attempt to cover the possible expenses for the features that are expected to be clarified already during the development process.
- Sell discovery and BA sessions to cover potential losses. To explain it simply, this is a practice of pretending to do something when actually doing nothing. In this case, the development company may schedule additional research and business analysis sessions to bill the customer for potential losses in advance.
- Bill for more time. This is one of the dishonest web development estimate practices ever, so here is evergreen advice - make sure to constantly control your development team and keep communication with project management.
- Substitute the team members. As you know, the average salary of a Middle software developer is lower than the wage of a Senior. Some companies take the salary of a Senior as a starting point, but the project is actually developed by the Middle specialists, which, in turn, also increases the development time and the final price.
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How to estimate a web development project - main tactics
Despite so many web development estimation challenges, there are still some life-proven practices experienced tech companies used to provide their customers with accurate and realistic estimates.
- Top-down or by analogy. The simple projects developed according to the Waterfall methodology can be estimated by analogy. When the development company has the experience of creating a website the new customer would like to have, they can just come back to the estimates they have already done and adjust them.
- Bottom-Up. In this case, the development team breaks down the project into estimable modules. The modules are divided into tasks and subtasks, and each of them is evaluated, being guided by the practical experience.
- Three points estimate. According to this approach, each of the tasks or features is estimated according to three different scenarios - pessimistic (in case something goes wrong, the market situation changes, etc.), realistic (the one that is more likely to happen), and optimistic (for the case the factors that streamline the development process appear). After making these time estimates, it becomes possible to come up with an average number of hours necessary to develop a project. The number of hours is multiplied by the salaries of the corresponding tech specialists.
How to make sure your web application development cost estimation is realistic?
Getting a realistic web project development estimate is important for most business owners. Here is how to make sure the final price is likely to actually coincide with the one you get at an estimated stage.
First of all, be guided by your type of contract. The type of software development contract can already say a lot about the price to develop a project. And while everything is clear with Fixed Price, Time and Materials and especially a Dedicated Team are more challenging to estimate. Still, make sure to pay closer attention to the estimate within the framework of the two last contract types - they have more room for dishonest practices.
Time and Material contract is very difficult to estimate, and this is the case when the three-point approach makes the most sense. By the way, you can ask a vendor to show you all three figures so that you can fully find out what to expect.
As for a Dedicated team, get to know them personally and don’t hesitate to ask about their rate per hour. Don’t hesitate to ask about project development control - you are in full right to know how much time was actually spent on the feature development, and how much time was initially estimated.
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