Ever have this great idea for a piece of software and you called your local software group and asked them if they could do it for $1,000 and they state no problem, only to get a bill for $30,000 dollars. Well hopefully this has never happened to you, but in order to make sure it doesn’t here are a few tips.

1. Plan- Plan out your project, walk thru the way it will work what you want it to do and order the features by their importance.
2. Get a quote – Always ask the software company to give you a quote on the project, most companies will get you this for free. You cannot expect a good quote without step one.
3. Quote Valid- Think about how many hours it would take someone to do your project. Expect to pay anywhere from $75 to $250 an hour for custom development. If the project looks like it should take 40 hours and the quote is $1,000, then there is a problem. If it the quote is for $16,000 then there is another problem. Just remember cheaper is not better and the most expensive group is not always the best.
4. ROI- If there is no return on investment, then don’t do it.
5. Payment Terms – Never pay for more than 50% of the project upfront if not less.  If the project is going to last months, set milestones with payments being dispersed on delivery. Always save a payment for the end when it’s all done.
6. No open contract – Never give the software shop a free reign to spend your money.  Have them stick to the quote. If you change the scope expect an increase in cost, but you must approve it. Make sure the contract states that there can be no budget over runs without your approval
7. Be Realistic – Custom software can be extremely complex as its completely tailored to the solution at hand. Do not expect custom software to be cheaper than a cookie cutter solution; also don’t expect custom software to be a fast process.
8. Own the code – Always own your code. Never do a custom solution if you cannot own the code the development shop creates. Do expect some tools such as CMS, tool sets, and add-ins to be propriety, but make sure you have a license to use them in the event you kick the software shop to the curb. Also, make sure they get you a copy of all of this before you pay them your final payment.

There is a saying in software development: You can have a software project fast, cheap, or good quality. Now pick two as you cannot have all three. In reality this saying is extremely accurate and something to think about when getting a quote on your next software project.

There are lots of great software shops out there just make sure that you are protected in writing as described above and make sure that both you and the software shop are being realistic in the pricing. If they offer no contract, then pick another shop.

This entry was posted on Saturday, July 3rd, 2010 at 1:04 am and is filed under 3E Enterprise Solutions, Custom Software. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.