How much will your project cost?

Business News Opinion

The difference between a product, a known good, a commodity, and a service, is that products can be sold at fixed prices.

The process is quick. You go into a shop. You pick your washing machine. You arrange a delivery date. You go home. Soon you have a washing machine.

You modern kids probably do it on a website. Actually, so do I. But bear with me on this.

So a washing machine is, essentially, a commodity. It does complicated things. If you asked an engineer to make you a washing machine, would it cost a bit more than £300? Yes. A lot more. Hugely more. We all know that. I think?

A website can be both a product based commodity item (CMS + theme + a few standard plugins) or it can be a very laborious process involving lots of custom work. At interconnect/it we mostly do the laborious stuff. Sometimes right down to working with custom webfonts for clients.

So imagine. You want a picture of a bird. You can go to Amazon, and search for “Picture of a bird” and you get something like this. If you like it, you buy it. If you don’t, you move on.

Custom work

But when you get to custom commissions, life gets a lot lot harder. Ask an artist to draw a bird, and what do you get? Well, it depends on how much time you give them, and how much you’re willing to pay.

Watch this video:

What do you notice about it?

They all fulfil a specification that says “Draw me a bird!” But if what you’re expecting is a masterpiece – well, you didn’t get that. The ten minute drawing is nice, but it’s still quite rough. But all are recognisably and clearly birds.

You might be very unhappy, but if all you were paying was a fiver, then the ten minute bird would be a good deal from an experienced artist. In fact, if it were by Picasso even the ten second bird would be valuable if what you were looking at was a picture as an investment.

Specifications matter

And of course, your actual specification would likely be more complex, in a business context. Say you needed the bird for use in a game? Well in that case you get into complexities of animations, asset reuse and so on. It’s not a one line email, something back later in the day, and a £5 invoice. Suddenly you’re spending £500 on a bird picture.

So you have various possibilities to think about:

  1. Do I just want something somebody else has already bought and will that do the job?
  2. Do I want to choose from options, or do I want to specify?
  3. How much money is worth spending here?
  4. And why are you doing it?

So when I respond to an RFP with the question “How much do you want to spend?” then I’m not just trying to leach as much money out of you as possible. I’m trying to make sure that I can offer you something within your budget and your expectations. I can build you a surprisingly OK website that fulfils many requirements for £1k. Or I can build you a great web application for £1m. If I know your budget, I can look at your requirements and see if we can fulfil them for the money.

Otherwise you’re asking me to guess between a doodle and a masterpiece.

There’s a little workaround

Sometimes I give three options that I believe would fulfil the requirements. The client can then choose, however, there are risks inherent. If you watch the speed drawing competitions on YouTube, you’ll see that almost every 10 second drawing goes over time. Usually by about 20%. The 10 minute drawings never go that much over time. In other words, the smaller the budget, the riskier it gets for the supplier, and the less interesting the job becomes.

The other problem is that coming up with options, reading a specification and everything associated with it all takes quite a bit of time. A recent project I know about had RFPs sent to 30 suppliers. If each put in a day of effort at the beginning, then that’s 30 days of supplier time used up. The supplier then shortlists the last three and gets them to do a more detailed proposal or pitch. That’s another three days each in preparation, a client visit and so on. So we’re now at 39 days of time. That means, that at typical agency rates, you should be looking at £30k-£40k on every job just to cover the sales process. If you’re spending £4m that might make sense, but in my experience most of these jobs are in the £50k-£150k range. Using up £30k of time in order to get a £50k job delivered means that many agencies are on a financial knife-edge. Especially when you consider that most specifications are much more on the “I want a bird picture!” scale than you might imagine. Even the long ones.

So to get around that, generally we don’t offer a full up front project fee. We give some guidance and offer some consultancy, but the first part of a project is called ‘discovery’ – if you regularly read our blog posts, you will have heard us mention the term before. This means understanding your business, your needs and how we can deliver a project effectively, without just throwing huge amounts of money at the problem. Sometimes we find clever, cheap answers and help a client cut their budget right down, sometimes it’s just not possible to deliver a brief exactly on a shoestring budget. We’ll always be honest and up-front about this.

And if all you’ve got is a grand… well, you’d be surprised what can be done with an off-the-shelf theme, some cheap hosting, and a day in our office. The solution won’t necessarily be as sophisticated as can be achieved with a larger budget, but you will have a solution. Just like a cheap Amazon drawing of a bird will do the job if all you need is a picture to fill a space on the wall. Not everything needs to be custom. Not everything can be solved off-the-shelf. It’s about managing expectations and treating each client and each brief as an individual.

David Coveney

David Coveney

Dave has been working in software development since 1988, starting with payroll development and then ERP consultancy for large corporates. He is a keen traveller, photographer and motorsport enthusiast, but now puts family first as he’s massively in love with his two little boys. Dave is still an early adopter. He was connected to the internet from his bedroom, way back in the eighties, had a personal website by 1994, was into the connected house in the late '90s, a smartphone by 2002, and a was the first in the office with a fitness tracker.