Estimates are estimates, not commitments
First, except for rarely-used Fixed-Price projects, the timeline and budget estimate, which is given by the service provider prior to the start of the project delivery engagement, is literally just an estimate. The final number can change for a variety of reasons, among which the following two have the biggest impact.
Scope change requests — business tends to transform and, consequently, project requirements and project management practices as well. Even a slight difference in a feature implementation can lead to a shift in the budget and timeline.
Risks — some risks can be identified beforehand, while others will only become visible when the project starts. A high-class service provider is differentiated from its lower-class competitors by the transparency of risk mitigation it provides its clients. Every change and risk is tracked daily, and the client remains updated on the most recent budget and timeline forecast. This gives the client the opportunity to change priorities or even stop the new project if required.
The second thing to know about estimates is that you can’t expect different providers to create comparable estimates based on a one-page project description. This is because a high-level description gives plenty of room for interpretations (and misinterpretations) of the project’s scope. Therefore, opting for a software development vendor based on high-level estimates with a one-page vision document is far from comparing apples to apples — you literally are comparing different understandings of the scope (basically, you are comparing apples to grapes and onions while ’your’ fruit is, let’s say, a peach). To achieve comparable estimates, you either need to produce more detailed business requirements or ask your service provider for a consultancy service; e.g., a Discovery project that Avenga offers as a part of its service portfolio.
Closing remarks
The most crucial things to consider when working with a software development vendor from the start are clear vision and concise communication. Establish your business goals, objectives, and expectations for the provider early on, and keep your vendor updated as you’ll need to change something along the way. Be open while communicating your budget and timeframe, and stay realistic about what can be accomplished within the project estimates. Finally, building a good relationship with your provider is key to a fruitful project – trust and transparency will go a long way.
Avenga is an international tech company with deep industry knowledge in pharma, insurance, finance, and automotive. The company’s IT specialists operate from 8 countries around the world, supporting digital transformation with projects along the entire digital value chain – from digital strategy to the implementation of software, user experience, and IT solutions, including hosting and operations. Interested in building a transparent and productive technology partnership? Contact us.