Episode Summary

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We build software. Great, so what is the actual cost of software development? There are plenty of reasons you may want to build custom software, but you probably have some questions about how much money you’re going to have to throw in to get exactly what you want. We go through how we estimate software costs and what the final numbers will look like.

Visit cityinnovationlabs.com/ask-an-innovator for some helpful links and the full transcript.

If you have questions about what an app may cost or if you have a concept you’re looking to get some help with – schedule a free consultation with us!

We’ve written a few things about Software Development

How to Contract the Right Software Development Company
Learn more about Agile Software Development
Learn more about Lean Development
We reference this podcast a lot in this episode

Timestamps

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How do you give estimations for software – 00:32
What does the estimation process look like? – 02:32
How do changes to scope affect the cost? – 07:22
How do we stay within budget – 09:41
How do I ensure my investment – 11:19
Isn’t there a way to build software cheaper? – 14:32
What questions should a customer ask about cost? – 15:46
What costs will I run into after the project is completed?– 18:40
Give me a dollar amount – 21:41

Full Podcast Transcript

Erin Srebinski: [00:00:00 ] Hi and welcome to Ask an Innovator. We’re here to talk about innovation in the software development space. Sometimes us, and sometimes others. This podcast is brought to you by City Innovation Labs.

Hey, this is Erin and Josh from City Innovation Labs. We’re here today to talk about software development costs. I have no idea what I’m doing. So Josh is going to kind of walk me through what it costs. Here we go. So Josh, how do we do estimations for software development? What does that entail? How do you get there? What do you give the customer when you’re finished?

How do you give Estimations for Software?

Josh Barker: [00:00:32 ] Yeah, it’s a great set of loaded questions you’re asking right now.  usually we’ll get that right away from customers that say what is software costs. And so a lot of people have preconceived notions that come in and if you’re a startup bright eyed, bushy tailed, you’re a young person saying I’ve got an idea and they come to the table. And I think that way discouraged a little bit because software is expensive.

Being frank, software is a very expensive endeavor. It’s not a $500 endeavor, add a few zeros and you’re looking at that sort of endeavor.  That’s where we help customers understand the why’s behind software costing so much. It definitely is a loaded subject that has so many different avenues of helping customers discover how much does this cost

The analogy I like to use a lot is actually the one of building a house.  You can imagine if you go out and you build a house, you don’t go out and build a house.  You don’t go out and ask a builder, “How much does it cost to build a house?” Like, that’s just like, right.

It’s like, that’s what you’re asking. How much does it go? The builder’s going to ask back, well, does it have a basement? Does it have two double stall garage? Does it have, two-story like, why give me details? And that’s what we are talking about? Is it a shed? You know, like if it’s a shed, it’s a lot less, you know?

That’s exactly the type of tension that we deal with when people ask, well, how much does software cost? Generally speaking,  if they want early kind of numbers, I’ll give them ranges of costs that says it could cost anywhere between here to here for this sort of thing. But, it’s really difficult unless you start to really dive in with the customer about what is it you’re exactly trying to build.  Software is a very custom thing. And so when we’re building it, just like a house just like spec houses, there is such a thing as we could set up open-source software that we kind of have some ranges of how much that would cost better dialed in, but a lot of it is just going to be completely custom.

What does the estimation process look like?

Erin Srebinski: [00:02:32 ] Okay. When we’re working through that and trying to give an estimation and tell them what it is, what process do we go through to get a better picture of what that actually means?

Josh Barker: [00:02:43 ] That’s good. So what we do is we first we have an initial conversation with customers and we say, “What is it, give us the high-level executive summary of what you’re trying to accomplish.

Generally speaking, that’s a 30-minute conversation. Usually in that meeting, we schedule a lightweight product strategy workshop. We offer a full strategy workshop and an innovation workshop, two different types of workshops, but we offer a very lightweight workshop to those types of customers that we say, “Hey, what we really need is about an hour or two of your time,” to guide them through some exercises to understand what needs to be built.

Right? So orders of magnitude,  what are we talking about?  In that workshop, we do three different exercises. We do persona creation and mapping.  I  group that under one exercise, we’re very human-centered in our software development. You know, we, Erin and I talked about lean startup, listen to that podcast on how we do software differently, but we effectively start with the market and the end-user.

And so who is that? What are their core needs, their fears, their wants their desires, how are they going to use it? And so we create these personas and even put names to them. You know, we’re creating software for Bill, but we’re also, secondarily, creating it for Mary and Joe. And so we create this map and we map out the customer and then that helps us inform, as we’re talking about.

The second thing we do is we go through a journey mapping session. So these are all design thinking exercises of helping our customers understand kind of the process of what they’re asking to build. And so we go through and we map out if there’s a current process, some manual process, we map out the current journey and then identify friction points.

And if there is a future, you know, we’re taught, it was a future process, right? What would it be with the app or the thing we’re building? We map that out.  We mapped that all out and we can kind of visually see it. And then the last thing we do, each one of these kind of lead to another, is story mapping.

Story mapping is the process of kind of mapping out. We map out the high level, what I would call Epic level features, the large buckets. So for example, we know that the app you’re asking for needs a login, that needs this other thing. We map out a lot of those different large bucket features and then we even move them and dial them in too. We talked about it in the lean startup podcast: the skateboard, scooter, motorcycle, car, and we divide them into these different phases.

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<figcaption>Red is a typical Software Development project, Green is how CIL runs a project!</figcaption>
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Then we can come to, this is what our MVP would be, delivering a skateboard to the marketplace. Generally, that’s the process.  We have a D4 Innovation Model and what that model is, is it’s a very structured way of how we build. The first step is we try and map to the cone of uncertainty. So that’s something that you could literally Google. It’s not something I came up with it’s a project management concept.

The amount of t