A Step-by-Step Guide to Estimate Project Development Cost

Introduction:

A project development cost depends on many components. However, the majority of the cost is made up of effort and time that are spent on the software. The software development cost can be divided into two categories: direct costs and indirect costs. Direct costs include the expenditure of the each offshore software developer, the cost of resources, hardware costs and other things that directly affect the cost of the software. While indirect costs include the cost of testing, security and quality checks, which are not directly addressed.

3 Key Factors That Affect the Project Development Cost

As mentioned, there are a number of things that can affect the cost of development. However, we are discussing some key components that make up a total development cost.

#1. Size

Size of the project is one of the major factors that can give you a rough idea about the cost. That’s simple: the more pages you demand, the more work will be done to develop those pages and the more you have to pay for the software. Pages are simply the interface that your users see when they tap on different elements through your software.

#2. Complexity

The complexity of the project includes the number of functionalities, design, coding, testing, integrating third party apps and so on. A simple app with fewer features will cost lesser than a complex app containing loads of features.

#3. Budget Constraints

You probably have a fixed budget that you would want to spend on the software. Define a budget and discuss it with your software development company along with the functionalities you wish to implement.

How Cost of Project Development is Calculate?

In order to successfully estimate the software development cost, it is necessary that it should be measured. Only a competent offshore custom software development company can provide budget estimating in the most efficient way. Here are some common approaches that can help you calculate the project development cost.

1. Involve Stakeholders

The involvement of the company’s stakeholders plays an important role in estimating the project cost. Urge them to share their vision with you. If they have some high-end expectations, let them know about the expected budget. Help them cut down unnecessary features and implement only important ones.

2. Be Clear With Your Ideas

Get a quick understanding of your client’s requirements, and determine what and how you are going to accomplish them. Assess the idea and come up with a viablsolution that meets your client’s budget, expectation, timeline and deliverables of the project so that it starts yielding results soon.

3. Break Project Into Deliverables

Once you get the idea of the project, divide it into several parts or deliverables. Now estimate the cost required to complete each task, so you can better estimate the total cost of the project.

4. Reevaluate Your Estimation with Team

With your project cost estimation sheet in hand, get it acquainted with your client, the project development team and your project history to make sure you have a better idea of the budget, skills and experience required to accomplish the project.

5. Ask As Many Questions Possible

In order to be completely clear with every stage of the project, keep asking your team members how they can best deliver the project. Ask how and why. Asking questions will help you examine the estimate and discover hidden costs and assumptions.

6. Keep a Buffer for Unexpected Cost

Planned costs are never a concern. What may ruin your budget is unexpected expenses. Projects rarely go in accordance with the cost. So, be sure you are prepared with a budget for risk, amendments in project scope or schedule and any other uncertainties that directly or indirectly affects the budget.

7. Take Hidden Expenses Into Account

Indirect costs can greatly impact your project. Be sure you consider a separate budget for project maintenance, labor cost, reporting, testing, invoicing, travel and other costs that may arise unexpectedly during or post project delivery.

8. Recheck Project Cost Twice

Don’t rush into providing the development cost. Review and recheck your budget list to ensure all the expenses, including direct and indirect costs are properly considered. Mistakes in evaluating the cost for exchange rates, tasks and labor may turn out expensive.

9. Be Honest

Never offer under or over estimation of the project, which may be stressful for you later in the development cycle. Try to be as accurate, honest and straightforward as you can with the budget. It will make project development much more fruitful and build a strong rapport with your clients.

Conclusion

Getting a well-researched estimate of the project cost is not an easy task. But, being a well-established offshore application development company, ManekTech has a pool of project managers and developers, who can not only help in estimating accurate development cost, but also help you execute your project in the best possible way.