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The 9 biggest errors in the evaluation of an IT project – How to avoid them?

Kamil Dziuba
CEO @ GMI Software
06 May 2021 7 MIN OF READING

We are facing a very important stage of application development. However, the valuation of an IT project carries with it a high risk of errors that will burden our entire venture. What are the mistakes and how can you avoid them?

We already know how important it is to do homework before our first meeting with the software house and to set clear priorities. Today, we reveal the nine most common mistakes made during the valuation of IT projects.

Error #1: Let the software house set a budget for you

We are running away from clearly defining our budget at the very beginning of the project. We fall into the trap of a vague question of the “How much does a car cost?” sort. Although we really realize that, just like the prices of cars, the prices of IT projects may differ by tens of thousands of złoty, we avoid estimating how much money we can spend on our project.

On the contrary, we hope that our IT company will present the budget for us. Of course, a software house can do it, but the price range will be very broad in such situation. We may feel confused if we see a price verging from 25 to 75 thousand złoty. We will lose a lot of time reaching common ground with our company and understanding the factors affecting the valuation. We will extend the whole process by discussing what cooperation model and what goals are possible at the price of 25 and at 75 thousand złoty.

Solution: Be specific. Here’s your budget for an IT project

The best thing you can do is determine the budget at the very beginning and grab the bull by its horns. The rate will help you and your IT agency to clarify whether you invest in MVP creation, or focus on a long-term goal in the form of a final product of high quality. The Product Design Workshop is of amazing value in this situation, opening the door for the proper naming of the product that is the best for you and fits your budget. Your software house will tell you about their rates without any problems and will estimate the time and workload associated with your project. It may turn out that creating the product itself will cost 25,000, and you can spend remaining 25,000 from your budget on the necessary marketing and conversion of leads into future customers.

Error # 2: You don’t reserve time for organizational works

The work put into the project is not just coding and subsequent testing of the product. When valuing the process, we forget about taking into account the time necessary for organizational issues.

Solution: Get to know the specifics of work on the project

Drawing road maps, scheduling sprints, and evaluating individual stages also absorbs the team’s working hours. The sooner you understand the specifics of a project’s life, the better for its correct pricing and efficient conduct.

Error #3: You skip the analysis and design stage

We lose a broad scope and a further perspective of designing our solution. In the valuation, we omit the time necessary to develop the architecture of our application.

Solution: Make some technological assumptions

IT projects can be very effective and dynamic if you chose the scrum model. Despite the agility included in the style of this work, you must remember to adopt specific technological assumptions of the project when planning the budget. We return here to the need to correctly formulate our goal and product priorities.

Error #4: You are too optimistic about the valuation

In other words, we estimate the time needed for programming work without taking into account factors that can slow it down. A perfect example of a situation that extends the duration of programmers’ work is adding a function of deleting records from the database. In most cases, they cannot be removed but should be “blurred” in such a way that it cannot be identified what they concerned. In practice, the task that should take your IT company thirty minutes of work grows to two hours.

Solution: Analyze and remember about the quality

When estimating work on the project, you must remember to maintain the quality of solutions. The steps you need to take are:

  • Analysis of the full range of tasks
  • Designing the solution
  • Preparation of automated tests for the application
  • Implementation and maintenance

This is where good technological assumptions come in handy. Already at the beginning, your software house can design appropriate algorithms that can later be used in various application modules.

Error #5: You don’t think about implementation and maintenance costs

Designing and writing the application is one thing, but if you omit the costs of its implementation and subsequent maintenance in the valuation of the project, after 3 years you will have to face the problem of technological debt.

Solution: The right scope of work

The project budget must include: ensuring the quality of the entire product (Quality Assurance), i.e. creating automated tests for key system elements, maintaining the server infrastructure, updating libraries and plugins in order to, for example, minimize vulnerability to attacks

Error #6: You don’t check how the software house operates

Errors can happen also on the other side of the fence. When valuating a project, it is crucial to estimate the scope of tasks. If only one person is responsible for task estimation in the development agency, you can be almost sure that any inaccuracy committed at this early stage will come to light in the project duration.

Solution: Getting to know how your partner organizes work

For example, the estimation of project tasks should take place in the form of planning poker. Thanks to this model of work, the entire team of programmers watches over whether everything is written down correctly. This way, any doubts and potential risks can be eliminated during a session with a Product Owner.
Let’s make sure – let’s ask how many people from the agency took part in task estimation. If it turns out that only one, you should seriously consider whether you have chosen your software house well.

Error #7: That was the quote and let’s stick to it

You stick to the fixed price of the project too rigidly and don’t take into account an agile approach to its implementation. It is more than certain that changes will occur in the duration of an IT project. If you are not prepared for them organizationally and financially, they will stop you from progressing in works, cause waste of time and generate additional costs.

Solution: Get ready for changes

Instead of causing downtime to write down specifications for each change in application development, get ready for them in advance. Changes in the project are inevitable, but the real art is to react to them sensibly, remembering what is most important in the project. The priorities.

Error #8: Unrealistic deadlines

This error is a double-edged sword that will be used by both you as the customer and the software house executing the project. If you set an unrealistic deadline, you risk that the IT company will increase your rate, hoping that it will be able to extend the team and thanks to that complete the project on time. However, along the way, they will have to hire and train new programmers, which increases the risk that they will exceed the deadline anyway. You will be left with a product for which you paid more than you should have and, in addition, did not receive on time.

Solution: Be down to earth

Don’t overplay it. Set a realistic deadline together with your IT partner.

Error #9: You want to have everything

As a customer, we often have too broad expectations for our product. We cannot decide on specific functions and want to kill a few birds with one stone. Our vague vision of the application we want to create will not only unnecessarily prolong talks with the programming agency but also significantly increase costs.

Solution: Choose the most important

Make a key decision and select the most important functions that are to distinguish your application on the market. Thanks to this, the software house will effectively determine the time of implementation and finally finish the budget of your project.