How Much is My Software Project Going to Cost?

This is usually one of the first questions that comes up when considering building custom software, and it’s one of the hardest to give an accurate answer to. Here’s why:

Estimating the cost of a software development project involves predicting the time and resources required to complete a complex and fluctuating process.

One example we’ve used in the past is to compare building a piece of software to building a house. With building a house, the materials are known commodities, the terrain is static, and the blueprints are set. Additionally, unless you are building a truly unusual home, your workers are completing a process they have done time and again with only some minor variations. And even so, the majority of construction projects are not completed on time or on budget.

With building software, to extend the analogy, the materials involved are often new and have never been combined together before, the terrain is shifting, and the blueprints change as you zoom in on their details. As a result, building software has an even steeper uncertainty curve when it comes to estimates than building a house.

Here are the factors that can impact the cost of a software development project:

One of the biggest challenges in estimating the cost of a software development project is how frequently changes are introduced as the project moves through phases towards completion. Sometimes these changes are a result of uncovered technical limitations, but more often they emerge because as the project progresses, the client can better see how to improve on their original idea and make something more valuable to their users. Changes like these benefit the success of the project in the long run, but they do alter the scope and can impact the timeline and cost. Additionally, the development process itself is iterative and incremental, meaning that it is difficult to predict the exact steps and resources required to complete the project.

Another factor that can impact the cost of a software development project is the skill level of the development team. Highly skilled developers can often complete tasks more efficiently and effectively, which can result in lower costs. However, they may also command higher salaries, which can increase the overall cost of the project. At Vitalsphere, we only employ senior developers. This means that we can guarantee consistent, high-quality work done in an efficient manner, but it also means the upfront costs may be greater than those for a team that would do lower-quality work up front with higher maintenance costs down the road.

Finally, the technical resources required to complete the project can also impact the cost. This includes the hardware and software tools required, as well as any necessary licenses or subscriptions.

In short, estimating the cost of a software development project can be a difficult task due to the inherent complexity of the process, the skill level of the development team, and the resources required to complete the project.

Many agencies may try to occlude this uncertainty by offering fixed-bid statements of work, but in these cases usually one (or both) of two things ends up happening:

  1. The agency has padded their initial fixed bid to account for inevitable unknowns so that they can be certain they will turn a profit in the likely event that things become more complex than anticipated.
  2. The agency has bid low with the intention of amending the statement of work partway through the project as complexity unveils itself.

Instead of playing this game, we would rather charge only for the work necessary to complete the project and be transparent about this throughout the project. This is why we prefer to work with our clients on a monthly retainer model insert link to blog post. This process requires trust, but it maximizes efficiency and prevents additional problems from being introduced.

At the start of our project we will work with you to estimate the time and budget necessary to build your software, and we will keep you updated throughout the process on factors that impact that estimated timeline and budget so that you can decide if and when to cut scope, extend the timeline, or increase the hours put into your project.