“But how much will it cost?” is the sentence that starts and, sometimes, ends projects. Find out how to decide which estimate is best for your type of project and set it up for success from the very beginning.
How to determine project estimates
Every project, whether a simple website or a complex web app, starts with an idea. Maybe it’s some rough usability concept or functionality or, perhaps, a visual presentation. Whatever it is, one of the first things on your mind after the conception of your idea would probably be, “how much does it cost to make a project, whether it is a website or an app?”
With more than a decade of experience, we can tell you that this question is not that easy to answer accurately without investing a pretty big chunk of time upfront. Estimating the cost of implementation heavily depends on the nature and complexity of the project.
To answer this perpetual question about the cost, budget, and timeline, we use 4 types of project estimates. Each type offers varying degrees of accuracy and information, and each is designed for different circumstances.
1) Ballpark estimates
Originating from baseball in the US, this type of estimate will give you a rough idea about costs by providing a potential range of costs you might expect.
The purpose of this estimate is to answer the question of whether or not you can even pursue the given project.
A ballpark estimate in Degordian is free and usually includes filling out our project brief form or sending us your brief, as well as an up to a one-hour meeting with you.
Because the ballpark estimate is generally an educated guess, it shouldn’t be taken with much authority. These types of estimates have been known to vary substantially from the final cost, by as much as 50-70%, because of the many unknowns within the project.
With ballpark estimates, it’s easy to overlook the small (and not-so-small) details which add up. They can be:
- Misunderstood features, where you, as the client, might have one idea and the designer or the developer has another.
- Unstated features, or simply features that are implied but never mentioned during the initial brief.
- Features with a bare minimum of clarity, where the level of detail about the feature is not fully explored and analyzed and can cause a significant rise in the complexity and cost of a product.
- Unplanned and unexpected features might arise due to previous points mentioned here that you weren’t aware were necessary for your project or became a requirement during implementation.
Should you start your project with a ballpark estimate?
The short answer — absolutely NOT.
The long answer — this type of estimate will give you a rough idea of whether the project is viable and what its cost might be. It will provide you with an idea of what you’re up against and if it is reasonable or not to pursue the project.
If this estimate seems doable, your next step should be a Discovery estimate. Or, if you decide that you have enough information and that the varying cost is not an issue, you can go with the flexible estimate approach.
The main takeaway here is that you understand that ballpark estimates are just rough quotes, and those figures are not set in stone.
2) Discovery estimates
The Discovery process is a process we have designed for project implementation.
It starts with a kick-off meeting, and ballpark estimates are a part of that process.
A Discovery estimate is a product of the discovery workshop meeting(s) that some companies like to call road mapping sessions. These are brainstorming sessions with our clients during which we define project specifications. We provide expertise and skills, give suggestions, and advise on best practices while the client presents their business background and plans. The output is the Project specification document and the discovery estimate.
The Project specification document defines the main aspects of the project, its systems and components, goals, and priorities. It also includes the discovery sitemap, which defines the structure of the project, wireframes/mockups of several most important parts of the project, a moodboard to illustrate the design feel, and the discovery cost estimate document. Discovery estimates can be very accurate, depending on how much necessary information we have agreed upon during the workshop. As a result, the final cost can be within a very acceptable margin of 0-15% creep.
When should you consider going into the Discovery estimate?
If you have a fairly limited budget and timeline, or if you’re very risk averse, then this approach is for you.
The Discovery estimate’s goal is to have a more detailed estimate that will eliminate most of the project’s unexpected scope and cost creeps. In addition, it will reduce misunderstandings of the project and its parts and prevent pushing back a launch date.
Discovery estimate and project output usually take 2-4 weeks to be finalized.
It’s most suitable for projects with up to 400 hours of work. As you get beyond those 400 hours of work, the margin of error starts creeping in, and estimates become more and more inaccurate. For those types of projects, we advise a Flexible estimate approach, explained below.
3) Segmentation estimates
These types of estimates are usually implemented after the discovery process when both sides agree that even after the brainstorming and research phases, we don’t have enough information to have the entire project scope defined.
The approach here is a mix of ballpark and detailed estimates, where we provide a ballpark estimate of the entire project and then estimate in more detail segment by segment. That means we will provide rough numbers on the complete project (design, development, QA, etc.) and then re-estimate the design phase, which we will implement. Once that phase is completed, we will estimate other phases, one at a time, and implement them accordingly.
This approach provides more flexibility than detailed estimates since it allows you to rethink and change some parts of the project along the way.
Segmentation estimates are suitable for all project types.
4) Flexible estimates
This is the most common approach when building complex projects, especially for ones in the 400+ hours range, and we call it an agile or flexible estimate.
With this approach, we focus on the core of the project. The team maps out the core structure and functionalities of the project and then provides a cost range for each identified component of the project. This is far more accurate than the ballpark estimate but less accurate than the detailed estimate. This is the process of identifying MVP (minimum viable product), and further expansion and upgrading of the project are based on the information collected during the MVP implementation.
With flexible estimates, we dive quicker into project implementation and have an iterative approach in the delivery segments of the project. That means the components are broken down into smaller segments, well-defined, and delivered as fast as possible. This provides flexibility in adapting to changes and requirements figured out during the process and also having some aspects of the project delivered faster, ready to be tested, and refined.
In our experience, flexible estimates can be implemented as the pay-as-you-go system where the team budget is transparent to the stakeholders and regularly reported and evaluated, providing more transparency and building better relationships and trust with stakeholders.
Which type of estimate is best for you?
The best approach is the one that matches the project, making sure the best outcome is delivered in the optimal time for the best value.
If you only want to get a rough idea or validate it:
- Ballpark estimate (initially)
- Segmentation or flexible estimate
If you have a strict budget and time constraints:
- Discovery estimate
If you are not a person that focuses on details but on the bigger picture and is willing to accept hits and misses:
- Flexible estimate
Whether you want to evaluate the idea, define a project scope or implement the project from start to finish, the Degordian team can work with you to meet your needs. It is absolutely ok if you are not sure about the approach. Contact us, and we’ll work together on setting the right project course.
