We often talk to clients who are wanting to build a custom app for their businesses – usually to either expand into a new market, or to reduce the cost of a cumbersome manual process. We understand that the #1 thing these business owners and execs want to know at the outset is “how much does it cost to build an app?” – I’d want to know the same thing if it was my business – after all, you cannot write a business plan or proposal to the “mahogany row” folks unless you can come up with at least one of the following formulas:
Revenue – Cost = Profit
Savings – Cost = Profit
So, we understand the need for knowing the true costs before starting a project.
The challenge though, for a firm such as ours, and any other firm in our business, is that coming up with this cost number isn’t always easy. This is because of a few important issues that custom software developers face:
1. Every Single bit of Scope Effects Cost – and Sometimes Effort can be Deceiving
Even what seems to be a minor change to an end user can have a dramatic effect on the underlying technology for a system. Imagine if you will, a customer requesting a feature such as:
“Given a list of cities and the distances between each pair of cities, what is the shortest possible route that visits each city exactly once and returns to the origin city?” (reference)
This may seem like a simple feature to ask for, and in fact I would say that most customers would say “seems simple”. However, it is very very very much not so.
In fact, this requirement encapsulates what is known in computer science as “The Traveling Salesman Problem” (reference), which is a very challenging computational problem. In fact a recent attempt to solve and answer this question took approximately 136 years of CPU time at Rice University (reference).
Not only is it possible for what might seem like a simple requirement to actually take teams of developers and massive amounts of hardware to solve, it is also a great challenge to get a complete list of the scope of features as well. Rarely are there any software projects that start with a full and complete list of the features that the software should have – hence the dreaded “change order” AKA “scope creep”.
A little while ago, I got a call from a business owner who wanted to build an iPhone App and a matching Android App. The call went like this:
Me: “Hello, Unstoppable Software, this is Sam, how may I help you?”
Customer: “Hi – do you build apps?”
Me: “Yes, we do – iPhone, Android, Windows, Web – what do you need?”
Customer: “Well what I really want to know is, what does an app cost?”
This leads to problem #2:
2. Without Knowing the Full Scope, Accurate Estimates are Impossible
In the example above, what is the best way to answer the customer’s question? Some apps, in fact many apps nowadays, cost several million dollars – if not tens of millions of dollars for really complex apps. Other apps you can get away with just buying a template online and putting your address and phone number in, probably for $1,500.
But what customer wants to get an estimate of “between $1,500 and $20,000,000”? That doesn’t help them move forward, but without more info, it is sometimes the best anyone can reasonably do.
Said another way, if you ask a stupid question, you’ll get a stupid answer!
So, if knowing the whole scope in detail is critical to providing an accurate cost, the best way to move forward then is to do the right thing and engage a client in a discovery effort.
Working through a detailed, in-depth discovery and design effort for your custom application is the only way that a team of developers is going to understand exactly what you want, and the only way that you’re going to get a realistic, accurate cost for your project.
It’s also the only way you’re going to capture the full list of requirements for your project – and avoid the dreaded pain of “Change Order Hell”.
Sometimes, we get the objection that it is not normal or fair to “charge people for a quote”. Folks that make this argument are really undervaluing the importance and value of good, quality software system design. And, they’re right – it’s not normal to do what’s right for a software project. It’s also not normal to succeed at software development – that’s why up 80%-90% of software projects in the industry fail.
And, what I always say is that the customer is free to take our design document, or technical system specification, and get other quotes from developers to build the system – in fact, that design document is going to make those developer’s quotes come back in a more narrow range, because you won’t be getting super-low quotes from developers who haven’t really thought through the effort.
As I said in the beginning, most execs and business owners want to know what kind of funds they need to invest. In our case, the best answer is that a typical discovery effort can range anywhere from $2,500 to $15,000 to complete – with an average cost being around $5,000. That allows our team members to fully deep-dive into the customer needs to determine the best answer to their problems, and come up with a design and implementation plan that is going to be successful.
- Review and discuss your app’s requirements
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