Whether you’re building technology in-house or working with a partner to develop on behalf of your business, the ultimate question is: how much will it cost?
With an agency, you’ll likely get a quoted figure for overall development, which you can relatively quickly begin to compare against a budget that you have. From a financial perspective, working with an agency can be more expensive, but more straightforward to manage financially, as the overall cost is given to you upfront.
For businesses with internal teams, or looking to recruit a team, that builds technology in-house, understanding the potential cost of project development can be more difficult to plot. There are various factors to consider that will collectively give you an indication of the overall cost of project development, but even then, this is an estimate.
Salary & Staffing
For many projects, particularly those built internally, the salaries and invested time of those involved in development can be the most substantial cost of all. When working with a deadline (or in the early stages, a date range of expected completion), you can begin to roughly forecast the salary investment that you’ll be making into technology development by calculating:
(% of person’s time likely invested on this project / the person’s monthly salary, including all contributions) * the number of months the project timeline is.
Beyond that, for businesses looking to hire additional roles specifically for this project, there are also recruitment and onboarding fees to consider, as well as the time and financial investment in sourcing, interviewing, and hiring talent. It’s essential to strike a balance between hiring top talent and managing costs effectively. Keep in mind that salaries can vary depending on location, experience, and demand within the tech industry.
Learning & Development
Building new technology is itself a significant learning opportunity for those involved. Whilst learning “on the job” is incredibly effective and supports a person’s professional growth, it also introduces the opportunity for bugs, bad habits, and poor-performing code to slip into what will ultimately be a live product.
Investing in relevant resources, such as any development framework guides and ongoing CPD libraries can be beneficial to project development and considered as part of a project cost, with the long-term benefit being that this information is purchased once, distributed between a team and the knowledge continuously applied through this project and any future developments.
There should also be a budget for investment into L&D for the business case of the product, i.e. allowing your team to learn and understand the benefits that your development brings to the end-user. For example, a software development team creating an application for the construction sector should have access to a level of industry-relevant training material, to give a basic understanding of the common terms and language that is used and will likely be a part of the system that they are building.
Software & Tooling
Particularly for teams looking to grow to expedite development, software, hardware, and tooling can quickly become a significant cost. Each person on the team needs access to a suitably powerful laptop or desktop, a screen, peripherals, and various pieces of software. Depending on the breadth of your team, you’d like accrue software licenses for:
- Team communication – Slack, Teams, Zoom,
- Product and project management – Linear, Notion, Jira, Confluence,
- Design tools – Figma, Sketch, Adobe Creative Cloud,
- Code editing – Visual Studio, PHPStorm, Sublime,
- Database management – TablePlus, SequelPro,
- Code storage – GitHub, BitBucket, GitLab,
- Integration and deployment pipelines – ChipperCI, Forge.
The list goes on and whilst some of these tools are free, or freemium, the costs of just some can quickly escalate, particularly as your team continues to grow.
Data Licenses
When building a platform dependent on integrations and more so third-party data, access to this information can come at a cost. Whilst most data providers have adopted a somewhat SaaS approach of introducing monthly data fees or metered billing (pay only for the data requests that you make), these costs are always subject to change. When forecasting your development spend, account for the cost to access any data providers in the here and now, but also budget for increases in pricing over time.
When working with any data provider, it’s crucial to be aware of similar providers and, for at least one of those providers, have some form of migration strategy. Having the flexibility of being able to action a migration for your system to lean on a different provider gives you a level of resiliency to cost increases, or if the initial provider faces a service outage that impacts your system’s ability to function.
Infrastructure & Hosting
Infrastructure and hosting costs can vary significantly based on your project’s scale and complexity; you need to ensure the system remains available when real-world traffic begins to use it (whether that be internal users or a release to the public).
As more projects adopt a cloud-first approach, utilising the likes of Amazon’s cloud computing services, the costs of infrastructure now directly correlate with usage and traffic volume, where previously businesses would often pay a fixed monthly cost for dedicated servers.
Contingency Planning
Contingency planning is often overlooked but is vital to ensure your project stays on track, even in the face of unexpected challenges. Set aside a portion of your budget explicitly for unforeseen expenses, scope changes, or delays. A common rule of thumb is to allocate around 10-15% of the total project budget as a contingency fund. This safety net will provide the flexibility needed to adapt to unforeseen circumstances without entirely derailing your project’s progress.
When exploring the prospect of developing any technology project, understanding the full investment that you’ll make is key. When working with Embeddable, we work in your business to assess these key points and more to develop a time-bound and costed project scope that gives you a true reflection of the anticipated actual cost of your next project.
