How to Estimate Software Development Cost — Fireart Studio

Fireart Studio
Oct 17 · 6 min read
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Software cost estimation is always challenging. Every project is unique and requires a different approach to the price definition. We are humans, so it might not be easy to anticipate how much effort and time the project may need. However, we can provide some recommendations that can help you evaluate the project and make accurate estimates. Without further ado, let’s consider them.

Agile Contracts for Software Development Projects

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When defining the software development cost , it is important to understand that the price is a product of time and the team’s effort. Add more development time or the number of employees involved in a project, and you will get an increase in the costs. Naturally, it’s always avoided if possible.

The Agile development system is focused on delivering a cost-effective solution by balancing the time and the team and considering them as the variables. It allows providing different price options depending on these variable components. What does sound better to you? The fixed-price or variable cost? Of course, we should be flexible and keep in mind that it might be senseless to keep up with a precise price and time if the product doesn’t address the client’s needs at the end.

However, we should also consider that the fixed cost option usually gives more confidence to the stakeholder. There are several standard contract pricing and project estimation systems in Agile product development. So Agile contracts focus on the following:

Fixed price work packages

Early termination

Flexible changes

We promote not just flexibility and adjustments for the top results, but we also offer changes based on data. Some changes lead to the development of a fewer number of features. Until the change is equal to the initial solution or is even cheaper, it may add to the overall cost. Flexible changes are also usually possible in projects with long-term and proven relationships between the client and the team.

Additional work

Ranged estimates

We prefer to use a range of features across a range of story points, considering the scope of work as the variable but promising to provide a minimum level of value to the client within the fixed timeframe of the service package or entire project.

Our approach to software development pricing and costs

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Our software developers work closely with our customers and apply price evaluation techniques that provide more confidence to the customers. At Fireart Studio , we have devised our own approach to software development cost estimation for the fixed price project and would be happy to share it with you. So, let’s consider it in detail.

Initial high-level scope

Later, we define a set of epic features that are the bones of your software product. After that, we apply the MoSCoW analysis to identify what is really important for the project and what is just nice-to-have. They can be referred to as “Must,” “ Should,” “Could,” and “Won’t.” The last type of features could be important one day; however, it’s currently out of scope for this work package.

To decide whether to continue with the project, you must have enough data about the duration and the cost. There are three essential questions you must ask yourself before digging into the production process: When will we launch the project? How much will it cost? Will it correspond to our business strategy?

Once we get this information from the client, we are ready to prepare a proposal. We pick software developers with a specific skillset that corresponds to the project requirements. Once a proposal is accepted, we can move to the next project stage.

Product launch planning

Signing a fixed price contract

Final Thoughts

Originally published at https://fireart.studio on October 17, 2020.

Fireart Studio

Fireart Studio is a boutique design and software…

Fireart Studio

Written by

Boutique Design and Software Development Company. We build elegant digital products for startups and global brands.

Fireart Studio

Fireart Studio is a boutique design and software development company. With 50+ experienced designers and JS developers on board, we build custom digital products for forward-thinking enterprises and startups. You can learn more about us on our website fireart.studio

Fireart Studio

Written by

Boutique Design and Software Development Company. We build elegant digital products for startups and global brands.

Fireart Studio

Fireart Studio is a boutique design and software development company. With 50+ experienced designers and JS developers on board, we build custom digital products for forward-thinking enterprises and startups. You can learn more about us on our website fireart.studio

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