In the development market, there is no such thing as an average price. The same project can vary by a factor of 10x both in cost and timeline.
This isn't due to greed on the part of the owner. Many processes are involved, which sometimes aren't valued properly. These include test environments, maintenance, project testing, team expertise, workload, training, and much more. Even the use of paid/free/in-house graphics with or without copyrights plays a role.
Often, businesses survey multiple studios and create a competitive list with an estimated range and key advantages.
However, it's essential for you to understand only two parameters:
- Will the competing company complete the project?
- Will the investment pay off?
For the first point, consider the following factors:
- Reviews;
- Work process structure;
- Relevant experience;
- Approach at initial stages;
- Promises vs. results;
- Ratings, portfolio, reputation.
The second parameter is more complex…
Consider the following data:
ROI = Investment / Expected monetary result * 100%Oftentimes, ROI is calculated based solely on direct costs, overlooking indirect ones. For example, expenses related to employee training on updated processes, system integration, possible user attrition, etc.To estimate projected timelines and costs, you can use the following methods:
- Gaussian Bell Curve;
- Poisson Distribution;
- Top-down/bottom-up approach;
- Game Theory Method;
- Earned Value Management.
However, for most businesses, these approaches may seem overly complicated, so they usually find relevant teams and start the project instead. Alternatively, flexible project management methodologies are used. We'll discuss those later.