How to Budget for a Software Project

Matthew Dunn - 27/03/2018
It’s budget planning time – urggg.

It’s that time of year where IT/program managers and CFOs need to dust off the crystal ball and accurately submit a budget to the board for approval. But, how best to do it? If I under estimate it’s as bad as over estimating, so what’s the best way to appraise the budget needed for that software project?

One way is to submit a Request for Interest (RFI) and get a gauge on what is available in the market.  However, this is typically a long process and requires a lot of work on your side to produce the document and then go through the responses, meet with the vendors who are often just trying to fit their off-the-shelf software offering into your unique situation.

Then you have the issue of “low-balling” to contend with – arguably the biggest scurge of the software industry. This is where vendors give a “perfect storm” price to you assuming that the project will happen in a vacuum without issues, and then they hit you with change requests at every turn. So then how much variation do I put in – 20%, 30%, 50%? If you have to do that, then it invalidates the RFI and that’s time you haven’t got to waste.

Another way is to work with an independent software vendor, such as Kiandra IT who specialise in requirement and planning workshops. This allows the key stakeholders to undertake facilitated collaboration to fully understand their business challenges from all angles and define an approach that meets their needs. The workshop will use the latest user-centred design techniques to uncover the detailed requirements of the solution and the UX team will bring the clients ideas to life with prototypes or wireframes to test out the concept with real customers.

This deep-dive exercise, involves feedback, collaboration and input from a third party who have built a plethora of similar solutions, and allows you to have confidence and be safe in the knowledge you are on the right track.

One word of warning! Do make sure that this is offered as a standalone engagement, so there is also no tie in to do the build with the same company.

A final deliverable is a full set of scoped requirements and (most importantly) a guide price for the build of the solution.

Now you know how long that piece of string is, have a set of requirements defined, a budget, as well as an overall clear vision of the end state…so  you can sell that crystal ball on eBay!

For more expert advice on starting and planning your software project, speak to the award-winning team at Kiandra.

This post first appeared on LinkedIn, published by Matthew Dunn, Business Development Manager, Kiandra IT.

We're ready
to help.

Give us a call, send us an email or fill out a contact us form to speak to your friendly, local Kiandrian.