How to estimate software development cost and time?
Understand the estimation
In the world of software development estimation is an inevitable, mandatory routine. It starts with developers doing the assessment of their tasks and also has a solid reflection on the picture that the client sees during the cooperation
with software development companies or individuals. In any case, there are two core components, that everyone expects to get when it comes to software development estimation:
A. How much will it cost?
B. How long will it take?
How professionals do it
Regardless of the methodology the software development team follows, estimation should be done on a regular basis. There are different techniques for doing this. Some approaches consider using relative points (called story points, etc.) while others use a more straightforward principle just stating how many working hours this or that engineer needs to complete a specific task. There are other estimation techniques and all of them have pros and cons, but regardless of the estimation method, here is the point to conclude: software development estimation is a creative task and the result is subjective. Many companies require more senior engineers to validate other developers’ estimations to minimize subjectivity.
Estimation accuracy - the key factor
Giving the estimation is one thing, but meeting the estimation is a completely different matter. The ability to meet the estimation is mostly defined by its accuracy. At the same time, we need to understand that each software project, especially a startup, is unique and this makes it harder to estimate its development accurately. So what is the point of making an accurate estimation? The point is to encounter all possible engineering challenges, risks and consider them in time and money assessments.
Estimation challenges, explained on a real example
Imagine a simple chat (messaging) application. For many people, this type of application is a pretty understandable product nowadays. So the initial request to get a quote that development companies usually receive sounds like this: “I
just want a chat app like Whatsapp or Telegram. How much will it cost?”. And indeed, we all use many chat applications every day and their functionality is familiar to us, but very few of us realize that most of these features
were not presented in the MVP version of the same app(s). Such situations may cause a big misunderstanding between the client and developer. For example: “message delivered” status, “message read” status, “delete
message for me”, “delete message for everyone”, group chat, attach media, attach multiple media, audio call, video call, group call, etc. - these features are often considered as default and easy for development, and
that is far from being true. That “simple” chat application cost may vary from $5k to $50k just for the MVP only! In order to avoid such misunderstandings it is advised to follow these recommendations:
1. Work on detailed technical requirements as thoroughly as possible. It is impossible to describe everything, but the more detailed final requirements are the lower probability of significant misunderstanding is.
2. Work with professionals. The bigger experience the team has the better. Assessment-related risk is a known pain-point and it is better to find those who faced it multiple times and most likely know how to overcome it.
3. At the same time, there is an approach that is built based on removing the risk of misunderstanding in what will be done because what you need is already done and it is completely clear how it looks and works. This approach works
specifically well for MVP because at this stage a lot of products have tons of common features.
MVP Rocket’s approach
What we have done at MVP Rocket is we have developed and validated the quality of more than 70 most frequently used feature modules for software projects. We made them reliable, work smoothly, interchangeable, and compatible with each other. With this, we have managed to minimize the negative impact of the most risk-causing factor - uniqueness. This allows us to estimate the development of common features with a >90% of accuracy level. So the only potentially risky part from an estimation accuracy perspective is the unique functionality of the app. Moreover, we have developed a smart free online tool, that allows you to get the cost estimation for your project within a few minutes without any technical knowledge required.
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