Launch Lab
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Launch Lab

Budgeting for Software Development

…while you’re still discovering what you need

  1. You don’t need everything you think you do.
  2. Software is never really “finished”.
Which are your top two priorities?

Asking for a software development quote is a great opportunity to set yourself up for success.

Many potential software owners make the mistake of expecting a quote to include everything that they will need, all the way through to product launch. Software developers faced with this challenge often attempt to come up with a total project cost based on the vague requirements and an assumption that the client will be on the same page about what constitutes a “change request”.

Which’ll you choose? Scope or Cost?

So, what’s the best way to plan your project’s budget?

The team at Mindbox uses a couple different methods to help answer the big three-prong question (scope, timeline, cost).

1. Define a Small Project in Detail

If the amount of work being estimated is small enough (less than $20k or so), then the software team can usually estimate the project cost with some level of accuracy. This could be the Minimum Viable Product or an iteration towards that goal.

2. Define a Plan in Iterations

In order to efficiently build a software product while keeping risks under control, stakeholders should provide feedback often. One of the most effective ways to budget for this type of software development is by establishing a development velocity (ex. development effort per week) which can be increased or decreased as priorities change.

Regular feedback creates a better end-product

Either scope, budget, or timeline will have to change as new discoveries are made, but the cost of each discovery will be lower the sooner we make it.

Ultimately this is the more cost-effective of the two models when executed properly, but it requires trust and maturity on the side of the software owner. As new priorities are identified, smart software owners re-prioritize the scope of work, accepting that discoveries mean either cutting lower priorities or adding to the overall cost of development.Breaking scope of work down into small but complete pieces allows the team to avoid over-planning for features that may get cut or changed, using a just-in-time approach.

When is it “Done”?

Everyone on the team has a slightly different perspective on when software is ready to go live, after which the software will probably need to be maintained as long as it’s in use. Since active software is rarely considered to be “done” or “perfect”, it may be more helpful to think in terms of milestones.

Pick your approach.

For a realistic estimate on a software product development initiative, start by asking the right questions.

  • Either define exactly what you want to accomplish by breaking work into bite sized, estimate-able projects, then ask how long and how much it will cost.
  • Or else determine how much you can afford to spend and when you need work to be completed, then allow your software team to help work out what can be accomplished based on your priorities.
Photo by Startup Stock Photos from Pexels

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Lauren Jerome

Entrepreneur | Engineer & Technologist | Software Product Developer | Digital Strategist | Enterprise Consultant | Community Advocate | Philosophy Enthusiast