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How do you cost application development?

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How do you cost application development?

bajanpoet
Hi, everyone....

I am trying to get into the world of systems analysis/systems design, but would like to know how to go about costing my projects. I have a potential client who is interested in having me develop an application for her, but I have no idea how to go about giving her a fair price when she asks me how much I would charge.

How do you charge for applications which you design, code, implement and will maintain?
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cs
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The time taken to analyse, design, code, test and implement depends on the complexity of the task. The cost of maintenance is often far greater than the original development. If you've not got previous experience it will be difficult to give a realistic estimate accurately.
The process entails breaking the job into small elements, estimating how long each one will take and then building a price.

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bajanpoet
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something? In terms of deliverables, I would have to estimate the costs of requirements gathering, etc.?

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NOW LEFT TR
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don't sound ready for any of this. Perhaps a course or two in the filed may help. What if you fail to deliver / run in to problems. The idea is good but you just don't sound ready.

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bajanpoet
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but I still want to learn. I've written applications for organizations and friends before as a hobby, but I've never worked for a formal company where I have seen costing in real life. So "failing to deliver/run into problems" is not what I'm worried about. I just want to know how to make my hobby into a business eventually.

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markcar2000
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Experience in your "hobby" is not good enough. Many people would like to turn their hobbies into dollars but fail miserably when they discover they don't have the business knowledge or skills. The fact that you state you're not worried about failure tells me you're not ready. Errors and Omissions will sink your new business and old hobby very quickly. Consulting without proper preparation is likely to end in disaster.

If you proceed, protect yourself from personal liability by incorporating.

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Tony Hopkinson
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including the risk that you might not have identified or correctly assessed all the risks.
What you know is nowhere near as important as a good appreciation of what you don't.
You need liability cover, you need a process to document everything. You need the time and resources to manage your end of the project.
How confident are you of execution, and how much of that is based on real experience, not a feeling.
One big danger is you could succeed in the project, but fail as a business.
If I were you, I'd be looking to build up to this sort of level and I'd definitely be sticking myself through some business and project management courses.

Even with the best management and technical ability possible, there's still a good chance for a disaster of biblical proportions.

I commend your bravery, but remember most medals are earned posthumously.

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GT27
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Whilst I agree with TechMail that you sound quite inexperienced and may not be ready, I offer the following advice.
Simply work out how many days you'll spend on the following:
- requirements gathering
- design
- build
- test
- implementation
Then charge the amount of days by your daily price - check out internet job sites to find out an average daily rate for contractors with similar skills to yours and then you may wish to apply a discount due to your inexperience in this area.
In terms of maintenance and support, as a really rough guide, on an annual basis, charge 20% of the total development cost.
I hope this helps and good luck!!

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jaime_roldan
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What would you include as part of annual maintenance?
I believe patches (due to bugs found by client or myself)
What else?

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al
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You work your butt off preparing and producing the "child", then soon come to realize that all the work getting to the birth was nothing compared to the work involved in changes, training, and "maintenance". Like having children, it can turn out to be a wonderful experience, or it can go sour in a heartbeat.

Repeating the scenario helps some because you do learn along the way, but even the most experienced of us can have that one "child" that goes bad. You get consumed by this "child" and somehow (hopefully) try to keep the others going at the same time. Look up the definition of "stretched!" and you will see a picture of a "parent" trying to maintain a bad child.

Also remember that once you have produced your offspring, you are not in complete control anymore. Outside influences will cause required attention on your part. Watch the environment that your "child" is living in. Operating system changes, equipment upgrades, obsolescence, all take their toll in keeping it healthy and viable.

I say all of this so that you know the suggested 20% to 25% of the selling price per period may or may not meet your needs. Experience will help you set your maintenance price, but 20% is a good starting point.

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duffersingh2000
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I would suggest using a Layered aproach consider that we break the project up into some layers like :

Basic Functionality ->
This would be delivering the basic business functionality through the software. By this I mean all the business processes being done thru various application softwares if any or the basic minimum requirements that the firm would require on a day to day basis.Once this is studied u can quote after estimating the number of days it would take to achieve the minimum basic target.Once achieved it should be treated as a project completion with due payment the next phase would be the next project.

Enhancements to Current Business Logic -> How the current business logic can be improved . Once this has been done u could estimate (not precisely ofcourse) the profit tht organization would make from this change then base ur next quotation on the basis of that.

User Enhancements -> These are basically user required facilities which are just add-ons and should idealy be charged on an hourly basis to be kept on a minimum.

Maintenance -> It should be atleast 10% of the total project cost.

Note : For this whole thing to work there should be a good coordination between the Client and developer as in what the system will be capable of doing and realistic time frames with enough buffer period after each phase for bug fixes.