The Wild West of Software Project Quotes

By Stuart Smith | February 20, 2020 |

The Wild West of Software Project Quotes

You have an idea for a new mobile application you think might be the next breakthrough app everyone must-have. Or maybe your business needs a custom-built back-office application because none of the off the shelf applications match your business logic and workflow. Naturally, you decide to contact companies to recieve a quote for your project.

So, you search “mobile app development” or “custom software development” and find a few resources that look like they may be able to build what you want.

Your first question is probably, “how much will it cost to build my project”?

And that is when things get a little crazy.

If you’re doing your due diligence, you should contact at least three companies that you think are capable of building your application. You describe your project to someone at each of these companies in the hopes of getting a quote. The result of these conversations can range wildly, from quotes far more than you expected to others for far less. These quotes can be tens of thousands of dollars apart or even more.

So now you ask yourself:

How can these numbers be so far apart?

Who is right?

What will my project really cost to build?

Meeting discussing software development quotes

Apples to Apples

You need to be sure that you are describing the same thing to each company you are speaking with. Often your ideas about an application will change during your conversations. If your requirements are not one hundred percent nailed down prior to asking for quotes, each company may have their own understanding of what it is you would like to build. This can be an issue because their concepts of the application may not be the same.

Companies should ask a lot of questions about your project to get a complete understanding of what you would like to build. Sometimes these questions will trigger thoughts about the product that you may not have considered before. This is great for your understanding of the project, but other companies you interact with may not receive the new information. The questions asked and your answers can have an enormous influence on the quote you will receive.

For example, a company may inquire about your launch plan for a mobile application, whether you plan to launch regionally or nationwide. If you plan to launch regionally at first, this could decrease the effort to build your first version of the application. If the other companies you are speaking with assume you are launching nationwide, their quotes would reflect that.

During discussions about your product, companies may have suggestions for features or recommendations for development methods that could affect their quote. For example, a company may suggest either a Native or Hybrid app model. A Native application for iOS and Android can provide a better user experience but could also be a larger effort. Whereas a Hybrid app enables you to build applications for iOS and Android from one codebase. If a company suggests a feature you like and you agree that it should be in the quote for the application, other companies may not have considered this feature and their quote would not reflect the associated cost.

One way to ensure that companies are quoting the same thing to provide a set of requirements or a specification to each company. If you can provide a set of requirements and a complete description of the application in writing it avoids scope creep and some of the variances you will get when companies quote a project based on a verbal description.

web development quoting and costs

The Effort Is What It Is

Any software company quoting a project is trying to estimate the effort required to build your application. It all comes down to how many development hours will it take to build the set of features you want. If all the companies have the same understanding of the application requirements, the hour estimates should be pretty close. There will probably be some variance in the development estimates even if you have well-documented requirements. Estimating development effort is not an exact science. In most cases, the effort to build an application is what it is. The only way to reduce the effort (or hours) is to simplify the application by trimming the required features and functions.

Even if all the companies quoting the project agree on the effort, the price can still vary due to the differences in the hourly rate charged for the development resources. Hourly rates can vary wildly from company to company and can also differ based on the resources being used. The hourly rate for a developer in some countries can be far less than developers in other countries. Some developers have a better reputation for code quality, and some are notorious for poor development practices. Certain types of development resources can command a higher rate when compared to other developers that use a different programing language or technology stack.

In the end, if you have done a good job specifying your requirements and the hours estimates are similar, then you must decide if a company can provide a quality product at a reduced hourly rate. You should also understand the technical approach each company would use and the benefits and detriments of that approach.

Size Matters

The size of a company quoting the project will also influence the cost. Smaller companies can be more efficient and have less overhead. Larger companies will have more overhead on a project. An individual freelance developer has nearly zero overhead and can be most efficient when building an entire application alone.

Large/Mid-Sized Companies

Larger companies typically have defined processes that can help ensure project success. Building a quality application requires resources that specialize in specific areas. UX/UI experts can help make your application User Interface intuitive and simple. Graphic designers make your application look attractive and reflect the intended branding and feel. Experienced project managers can help keep you informed and guide you through the development process. They also manage a team of resources to get your project completed on time and budget. Software architects can set forth a plan to ensure your application can scale to meet future demands. Quality assurance testers make sure the product that your users see is as bug-free as possible. All these various resources can add overhead as they require good communication, team leaders and management.

Small Companies

Small companies can be more efficient and provide more pure development hours because they have less overhead from management and communication. However, smaller companies often time lack experience and processes. Resources at smaller companies tend to wear many hats and are often less proficient at certain types of tasks than others.

Freelancers

Freelance developers can have great success with smaller projects as they can be very efficient. They often handle everything required to build the application on their own. They have little overhead as there is no need for communication or management. However, if a project requires thousands of development hours, a single resource will take a very long time to deliver the project. Additionally, one person cannot be an expert in all fields. Typically a programmer will not have the same skillset to develop a slick, intuitive user interface as a designer would. Lastly, developers can’t test their own work very well. They know how it is “supposed to work” and rarely attempt to use the application in ways the public would.

Who Can Do The Job?

In the end, it all comes down to trust.

Who do you think understands the project the best? Who is most capable of providing you with a quality product in the end?  What is the effort to build the product and what other factors are important to you?

You must weigh the cost against the other factors that are important to you. Getting your version 1 product at an inexpensive price sounds great at first, but may end up costing you more in the long run. The product could be poor quality or unable to scale in the future. A cheap product may fail because of poor user experience in your first version. You only get one shot at a first impression. If you opt to go with a less expensive quote, you run the risk of having a lower quality product. You might be better off trimming some features from the application to reduce the cost of a preferable company’s bid.

Your best bet is to fully understand and document your requirements, understand the level of effort to build your application, and educate yourself on the technical approach being proposed to build your app and any other factors that will drive the cost. Being informed will help you understand how a company is quoting the project and select a developer that you can team up with to make your project a success.

Stuart Smith

Stuart Smith

Stuart has been working as a technology professional for about 30 years. He got his start working in systems operations/systems management and then moved on to software development. He has a diverse history with technology working with software applications and systems ranging from avionics, web applications, disaster recovery, license plate recognition, content management, and systems monitoring.