The Final Step to HOW MUCH?

The most straightforward way to estimate project cost would be:    Project Resource Cost x Project time = Project cost

Unfortunately, it is not that easy. As mentioned earlier, some resources may play more than 1 role on a project. Most resources do not work full-time on a project – for example, once anyone in a design role is done (Architect or UI/UX), there is no need for that resource to remain on the project 8 hours a day. They may be needed to confirm coding is meeting design requirements, or be available to tweak the design, but full-time is no longer necessary. 

So you may be asking yourself, “Why would I pay for a full-time project team when the entire team is not working full-time?” There are a couple of answers to this question. 

• You don’t pay for a full-time project team as the costs of the team are averaged based on the amount of work each resource completes per project. For example, the effort of a tester is usually expected to be a percentage of the entire project. The cost of a tester is based on this percentage.



• If your project requires a team, you are paying for a mix of skill sets. That means you have access to premium skill sets at a lower cost because you are only paying for a percentage of that person’s time. 

• Scheduling and maintaining a dedicated project team is instrumental in completing the project most efficiently. There is nothing more detrimental to a project than continually stopping and starting- it can be hard to regain the momentum to get the project back on track. 

A project team should work like a well-rehearsed production. Done well, necessary resources come on and off the project with no noticeable lapses in productivity.

To obtain rough cost estimates for a team, let’s utilize the following numbers:
These numbers do not reflect actual pricing of EuroGroup software development but rather, they are what we use to provide a ball park to work from.

• ~$400/day – for a developer*
• ~$7,000/week for a team*

*many factors affect the pricing of a technical resource and team – experience, role, size, location – these prices represent rough costing for quick estimation

Now applying the cost of a team with the project time estimates from the chart above, we can finally come to a project cost. Using these numbers as a guideline, and assuming a certain benefit from scale (meaning larger projects results in better costing/week), we come up with the following pricing chart based upon our time/complexity grid:

Sample Projects & Costs

The point to remember with this exercise is that the numbers are an ESTIMATE to get an idea of how much a project will cost and how long it will take. If the estimated cost is reasonable to everyone, then a more detailed quote can be generated, followed by a full project plan outlining the actual costs and milestones. Unless unknowns are discovered, detailed project costs tend to be within 10-20% of the cost using this method.

To put this all into context we put together the following list of representative projects:

Bug Fix – known issue

Resolution of a known issue in existing software that we are maintaining. This assumes that the cause of the issue is known, and the issue affects a minimal number of objects.

Type – Software Modification

Size – Small

Time Frame – 1-2 weeks

Cost – $1k-$7k

Proof of Concept Applications 

Often the first step for many startups, these projects tend to focus more on the look and feel of a new application and the possibility of achieving the desired outcome, more than providing functionality.

Type – New Software

Size – Small

Time Frame – 4-8 weeks

Cost – $20k-$30k

Mobile Applications 

Standalone application for iOS and Android. Moderate data collection, location awareness, secure cloud database interaction, push notifications, and administrative portal/functions.

Type – New Software

Size – Med

Cost – $30k-$50k

Time Frame – 4 Months

Now you know the steps and factors that go into reaching a cost estimate for software development. As stated earlier, every project is unique and cannot be costed using an exact formula, but defining project type and size, team size and resource costing get you the basics when determining your budget range.

We have worked with projects at all levels of complexity and with project teams of all sizes. If you have a project you are considering, we can help you define and cost your project, and work with your staff to develop the software that your business needs. Here’s how we can help you improve your enterprise software. We hope you’ve found this useful.