Best Practices and Tools for Software Cost Estimation

When choosing a dedicated development team model, Relevant gives you access to a pool of professionals that meet your requirements (level of seniority, skills, expertise, etc.). Once the team is formed, you manage them directly, communicating daily through audio and video tools. In general, all exactly like an in-house team, only in another office. Hiring a dedicated software development team is the best option if you want to quickly scale up your team and be in charge of the development process. It also allows you to avoid a lengthy hiring process and administration. It’s a first-stage estimation we provide when a potential client contacts us with a request to build a software product.

At the same time, countries in Eastern Europe and Asia are thought to be the most cost-effective and high-quality locations for outsourcing software development. A common misconception about software development cost estimating is that it is a technical issue that can be resolved using computation models, measurements, and processes. Every software development company follows a diversified methodology to cover all your business needs and construct a powerful cost of software development future-oriented application. Each approach consists of gathering information, design, development, testing, and software deployment. Medium sized web or mobile applications with more than 15 screens that have few critical features, an MVP or software remodeling. Apart from this, design complexity , amount of data analysis, the complexity of data migration, third-party integration, etc is also taken into concern when estimating software development cost.

Estimating & BIM

It’s easier to work with developers who speak the same language, and it isn’t too hard to have a real-time conversation. With proper trainings and guidelines, your clients, employees, or partners will onboard quicker, engage with the software more actively, and use the maximum amount of its benefits. Turn to ScienceSoft if you need a reliable and proactive provider to plan and deliver your software.

software development cost estimation

Then the developers start coding and transform the static webpage into working software. Bottom-up is the method followed for a minute-level estimation, segment wise. These estimates are further accumulated in order to get a final figure.

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Naturally, building an app like Uber will cost more than creating a simple app that’s just displaying your business’s latest catalog. The rule of thumb is, the more user interaction is needed, the more expansive the app should be. An Uber-like app allows different user categories, with each having access to different profile editing rights.

software development cost estimation

We work at continually elaborating and adapting planning from an initial high level down to more granular detail when it is appropriate and necessary to avoid waste and to enable managed change. Perhaps you’ve started to earn revenue, you’ve increased users or reduced costs. Either way, it’s much easier to ask for more money and time if you’ve already demonstrated a return or improvement and are delivering business value. This clause is typically allowed at any time and is valid as long as the project team and customer have maintained a strong, trusting and close working collaborative relationship. The benefit for the customer is that the project will finish early, having delivered all the valuable features necessary to make the product viable.

You have different software development options

India is the leading country for outsourcing software development and has been gaining momentum as an attractive destination for offshore software development. Analogous estimation is where you fetch information from a similar type of project to get a cost and timeline estimated for the project. So that’s what estimation primarily gets you sorted with – number of developers, amount of effort and cost required to do full justice to your project needs, feasibly.

software development cost estimation

It brings together multiple experts who are best suited to build an estimate based on technical and domain experience, a lively dialogue and sound justification. When discussing total size, total duration, and total cost, we always work within ranges, so as to mitigate risk, uncertainty, and unknowns. The proposal is the first tool in elaborating the duration and cost of a project. Once a proposal is accepted, we can move forward to provide a fixed priced quote. Of course, it’s important that a product delivers on its promises and the needs of its customers.

Software development cost estimation process simplified

The Use Case Points approach comes in handy when you are at a stage of outlining the functional requirements of your software product. After you’re through, you will be able to estimate the project cost on short notice. Its main challenge is to identify common use cases, which can be problematic for complex projects. To produce a software development cost estimate, we follow the expert judgment method and give a range of worst-case and best-case scenario estimates. This type of projects normally has more rigorous security, error handling, and logging features, and it is typically built on an underlying framework. Support systems designed for these solutions can handle up to three concurrent infrastructure faults before the users feel any impact.

  • A project management software that is used to manage and control projects, track resources, materials, and equipment used in a project.
  • That being said, we recognize that a rough-order-of-magnitude estimate is often a precursor to approving a prototyping project.
  • When the software cost estimation template is ready, we check it in with the client and move on to the development.
  • Furthermore, design requirements, adjoining of systems and networks in an application escalate the convolution, for which more assets, time, and budget are needed.
  • Some costs may appear over the life cycle of a project, and a precise estimation method is what draws a line between a successful plan and a failed one.
  • Getting a precise software development cost requires much deliberation between the developer and the client.

The empirical estimation technique calculates software development costs using data from previous projects and gathers information based on assumptions and a little guesswork. Following that, evidence-based cost-estimating algorithms are employed, and the company is given a preliminary estimate of the software development cost during the planning process. Custom software development involves both frontend and backend to build a scalable and sustainable product. Depending on the complexity of your future software, the scope and scale of the stack involved will vary greatly. Consequently, estimating software development costs is directly tied to the technologies you use to build your product.


It defines your software capabilities because the more unique the end product, the higher the cost. Barring the standard cost of the production factors—labor, capital, land, and business—known as the factor cost, consider how much it costs to create a new custom software solution. The time and effort required for software development are influenced by many factors. Several conditions must be met to solve the issues mentioned earlier and ensure a solid foundation for estimating the effort, duration, and capacity to create the program. With only 32% of software projects completed within budget and on time, a further 24% failing outright , and 44% of questionable status , robust cost estimation is a necessity .

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