Tag: BUSINESS

Introduction to The Issue: How Much Does It Cost to Develop A Software Application?

Posted on by Volodymyr Khitsiak

It is not a sign of good manners to answer a question with a question, but be prepared to receive a plenty of questions in response once you have asked your software development company about the budget. And the question, how much you are ready to spend, should not confuse you as well. Be sure that is OK and means you deal with a professional team.

One of the questions every client sooner or later will ask a service provider is how much it costs to develop a web or a mobile application. Topping a list of subjects for discussion and sometimes being among the first ones, there is no exact immediate answer to it. Even the software development companies with ten years of experience are not ready to provide you with a budget at once. It is possible only with a thorough understanding of the whole situation.

Correctly drawn up requirements help define the expectations from both parties throughout the project flow and bring light to the time estimation and thus budgeting issue. At our previous material Requirements Elicitation. A Starting Point to Technically And Feasible Software Products you can read a few advises to take into consideration before you start a new project. In general, a price-wise technical solution means that the best suitable technologies and right efforts in the engineering phases are applied. Usually, this approach leads to a valuable finished product. And underestimating any of these components you risk the value of your technical solution.

There is no magic formula that will uncover the numbers in your future bills, but once you have a technical specification, it becomes an easy math. As a rough guide, the price is formed based on the performed work according to the standard hourly rates. In other words, the resources, their hourly rates, estimated time of efforts form a total by a group of services.

You might wonder why the budget of one and the same query can vary from one to another service provider. And the gap can be sufficient. Does the most expensive mean the best? We all are the users of other services, and we probably know what can be if to go with the cheapest option. 

There are also two types of price models in software development field. The first one is time and materials contract type. It fits the best for medium and large projects as their requirements can be evolving. The second one is the contracts based on the fixed price. This type can be applied to small and medium projects. Their scopes are usually defined. When it comes to fixed price, you have to remember about all the risks connected with it in terms of long-term large projects. As statistics shows, it is difficult to estimate a scope longer than a few weeks.  And if a software development company does not apply a risks reserve properly, various scenarios can take place. More about this we’ll tell you in the next article. 

Summarizing all above mentioned:

The price depends on the project complexity.  

Keeping to a step-by-step approach can cost you more time and money, but will deliver expected results.

It costs more to work with a really experienced team of developers.

Following only cost-based decision is not trendy and reasonable.

Don’t rely on pricing, but rely on an expertise.

Engineering applications is not the same as engineering real business solutions.

In Client's Shoes

Posted on by Volodymyr Khitsiak

They say you will never understand a man until you walked a mile in his shoes. A couple of weeks ago we needed financial advice and service. That was a professional consultation on how to pay taxes in the US to be sure we are on the same page with rules and do not misconstruct them. We published a request online and within one day received, just imagine, two hundred and something offers. Yes, surely that was not the first time of outsourcing for us, but two hundred and something, and we had to make a choice!

Being a cofounder of the IT business and someone who has been working with many businesses for more than 9 years, I am aware of the competition rates in our field and all the challenges IT vendors face while applying for a contract. But at that moment, we were the ones who had to decide with whom to partner and to whom say thank you for the offer.

We have read every letter and offer as knew that behind each of them there was a person or a team who’d put some efforts to succeed. Someone more efforts, someone less. After a day of reading and evaluating, we felt walking in our clients’ shoes. But I would say we have learned much from that. We had this feeling, what on earth are our clients are thinking about when they’ve received hundreds of offers.

Nothing new in this story, just a well-known statement is repeated once again. Be sure, if we all spent a day in our client’s shoes, we would improve the skills to understand each other and to be more effective on both sides of the deal. This is a win-win deal for both.

Do you think we have made a big opening on how to choose a vendor and will share a secret key with you? That is not so, as well as it is impossible to reinvent a wheel. Intuitively we all know how to. After all, we have decided on working with a team who approach our request thoroughly. They were the last ones we received the offer from. I do not know whether the reason was they spend some more time to visit our website and learn more about us, but the quality of communications and then the experience they have was the one we expected. I was reading the letter which was addressed to us and I could clearly understand what benefits and values they would bring to our company. In other words, what I will pay for.

At that moment, I remembered one my colleague who pays high attention to the CV cover letters, when hiring an employee for his department. He said the more clearly specialists can express their thoughts, the more effective people they are. It is simple, but true. Translating this into a business language, if you can provide service of a high quality, you should be able to deliver a message to your client in an appropriate manner too.

To make a long story short, I’d say Unicrew is on the right way paying so much attention to the communication at each level of software development cycle. Transparency, trust, and interaction are our baseline. Otherwise, no one will know how good you are in software developing.

To that end, we have only one advice. If you are an IT executive of a large or a small business, your company is probably among those, that outsource IT service or are looking for a technology partner. Each time you have such need, ask, should it be like an outsourcing or rather a partnership, bringing business value to your table?