When searching for somebody to develop your digital product you always get stuck on one key question:
How much does YOUR project actually cost?
To be completely honest, nobody knows, salespeople will be quick to give you a ballpark figure, but in reality, you can’t estimate the true cost of developing a project while still in the incipient phase.
Yet, how do tech agencies negotiate their fees and how to they structure projects’ timelines?
In order to get a realistic estimation, you must be able to understand the following concepts:
- The many variables involved in a project’s estimation.
- How estimations are done.
- How to get the most accurate estimation from any agency.
In the video, Teo tells the story of a client who wanted to build a platform for conferences and reached out to Neo Vision asking for a price. So, they planned a discovery call in which Jack was able to explain his idea. Given that Jack wasn’t a technical person, his explanation was missing quite a few key elements. It was an unsatisfactory briefing, therefore the team guided him on how a briefing should be structured in order for Jack to be able to properly communicate his idea to his soon-to-be developers. It was recommended that Jack should take some time to do this briefing by himself.
The purpose of a briefing is for you, the business owner, to communicate to the development agency, an initial sketch of the flow, interfaces and features of your project. You don’t have to use technical language, but make sure you are as concise as possible so you avoid potential misunderstandings.
Keep in mind that the first briefing should cover the developing aspect, meaning design and development, which is completely different than the second briefing which includes launching the project. Launching involves additional costs for marketing, production, and so on.
After receiving the first briefing from Jack, the team structured it in a complex formal document including a rundown of the cost and timeline, and send it back for validation. Jack agreed but decided to opt-in only for an MVP at this stage, because fully developing the idea would consume resources that, at the time, he wasn’t willing to allocate to the project. After trimming down the non-essential features and keeping only the essential features for the core of the project, the team delivered the MVP.
Now it was time for the second briefing, which usually happens in more than one iteration. In this step, Jack can add or discard features, especially if they slipped out during the first briefing. The team will once again create a formal document including the newly added elements. The estimation is based on time and cost, but in this step, Jack was reminded of the additional costs that he might have to cover regarding the marketing, production, and other 3rd party integrations.
The estimation has two major components: design estimation and development estimation. In the design estimation, you cover the feel and look of the product while in the development estimation you specifically address the features.
The key takeaway from this should be that both of the estimations are 100% based on the briefing. Poor or information-lacking briefing might result in an incorrect design and further faulty features. It’s very important to take some time in order to build a comprehensive briefing and also to find the right development company in order to help you with it.
If you are in the same position as Jack once was, here’s a summary of the main things you should be aware of when searching for a fair price:
1. The many variables involved in a project’s estimation:
- The initial briefing;
- The list of interfaces and their complexity;
- The number and complexity of the features;
- Additional costs that any ongoing product incurs;
- And, how much is your product prone to change.
2. How estimations are done:
Technology agencies rely on past experiences and research to gauge how much time it would take to build your product. They split each activity required by the product into tasks and they estimate each one individually. They should also know from experience how many generic activities should take. A good example is the Q&A in a project that usually takes between 25% and 50% of the total development time.
3. How do you get the most accurate estimation from an agency:
- Include as many details in your initial brief;
- Don’t be afraid to ask as many questions as you deem necessary.
(For questions examples make sure to check out the video)
If you already trust your agency don’t be afraid to discuss expected budget and deadlines – it makes the job easier for everyone.
All of those make it impossible to get a 100% realistic estimation at the beginning of your project. The best you can do is eliminate or answer as many questions as you can.
Hopefully, the whole process became clearer now and you understand why trying to get the exact number out of your initial brief will only lead to disappointment along the way.
Aim for ranges and not exact numbers!
If you want our input on any of your digital projects feel free to book a free strategy call with Teo, Neo Vision’s COO.
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