Project Budgeting at AlamedaDev
When estimating software, many businesses start by posing the question, “How much will this project cost if it does a set of features?” However, concentrating on features is not strategic.
A proper budget enables us to prioritize your objectives. What spending limit will enable you to develop a product with a high possibility of success?
This maintains the spotlight on your objectives, where it belongs. We start with enough capital for a solid initial release, then extract as much value as we can from that investment.
The Price of Good Software
The cost of developing custom software is high. Projects at AlamedaDev typically last 6 months to 2+ years and range in cost from $50,000 to over $500.000. We work well with complex items that have a lot of potential for value. This is the price of final products that we have experienced, but everything has a preliminary stage. Contact us to find out how much yours would cost. We’ll meet to discuss your requirements and situation before helping you in creating a budget model.
Creating a Budget
Under capitalized projects carry a significant risk that AlamedaDev can assist you in avoiding. Some businesses keep spending money on the project without any kind of budget. However, they risk missing out on early client input and spending money on the wrong things.
Other businesses concentrate on keeping costs as low as possible. However, they have a tendency to waste numerous chances. You receive a return on your investment by investing more than the minimum — in the right places.
AlamedaDev prefers the term “sensible budget,” which provides you with enough funding to develop software that can begin generating revenue. Regardless of whom you collaborate with, the procedure below can assist you in developing an appropriate budget for your project.
Calculate the impact or value of your project
What is the cost of this software to you? Determine how much you hope to make (or save) with the product you’re thinking before establishing a project budget. Without this, it is hard to determine if the budget, regardless of potential cost, makes business sense. Understanding the project and business is necessary before building a model. We might be able to help if you’d like assistance with this assignment.
Recognize internal costs and obtain a rough estimate
You need to have a comprehensive awareness of the project’s internal costs, which should consider things like marketing, ongoing support, executive time, the opportunity cost of using internal resources, etc. Then, present your project to the software companies you are thinking about. Pay close attention to how specific they are in their response. It will reveal a lot about the level of forthcoming transparency you may anticipate from them.
If you speak with AlamedaDev, we’ll explain how we model our budget and engagement.
We’ll look at the project from all perspectives, finding risks and unknowns, using a variety of estimation approaches and our 17+ years of experience. We’ll provide you with a price range that, in our opinion, will provide you with the resources you need to succeed. In the case of an ideal team composed of developers, designers, and project leads, our budget model also shows cost in terms of time. We'll make an engagement model that will help you weigh your options and figure out how much money you need for your first release.
The next step is for you to determine whether the cost of the software is within your acceptable range. AlamedaDev won’t participate in projects that, in our opinion, are under capitalized since we are committed to the success of our clients. Underinvested projects are extremely painful for everyone involved and don’t end up being less expensive.
Obtain financing equal to 150% of the estimation
The truth of developing custom software is that there are always more ideas than there is money for. There is also a sizable chance that the development team will find complexity that was not anticipated, increasing the project’s cost. Secure internal funding for at least 150% of the rough estimate to safeguard yourself. Spending too little is considerably worse than spending too much.
Prevent with extra if it’s a rewrite
Over the years, we’ve rewritten some software products and internal tools and have discovered that each presents special challenges. Every rewrite begins with a list of essential characteristics that need to be changed. But until the project is underway, you can’t know certain things about those features. Examining the old system’s features always reveals information and irregularities that were initially hidden. Because of this, scope is particularly difficult to control.
Along the way of the project, be prepared for challenging discussions about scope priorities.
Establish the Phase 1 Development Cost
Establish a predetermined project budget for Phase 1 of your product by working with your software developer. It should fall within the range of the initial estimate (but be less than what you have internally funded).
A set spending limit will concentrate your and your team’s efforts on finding the simplest product that nevertheless provides value. You’ll have to decide on a difficult scope. The group will have to come up with original solutions and compromises. You’ll also be compelled to build less and release more frequently.
After the product has been released, you will learn a great deal from your users, which will aid in the planning of subsequent stages. Furthermore, there will be money left over for important updates and bug repairs.
Create the simplest solution that nonetheless provides value
You (and your software team) now have the difficult and creative task of determining how little software you can create that, when deployed, will begin generating value.
As many features as you can fit in one place can only lead to cost overruns, usability concerns, and quality problems. Instead, concentrate on a smaller number of functions and design your system with the user in mind.
While custom code is a significant part of developing software, the term “custom software” includes much more. That calls for making a multitude of choices across a wide range of dimensions (strategic, technical, aesthetic, etc.). As a result, we have grown into product development specialists, ready to advise you on the best path to take for both your users and your project.