How to estimate the development cost of your digital product
Planning to develop a digital product without spending extra time and money? Learn how to accurately estimate the development cost of your solution.
How to estimate solution development costs
Thinking of launching a digital product for the medical sector? Whether you're a startup or an enterprise-level company with decades of experience, starting to build a product is always a “tough sell”, especially considering the insane competition in the market. Time is of crucial importance as the faster you release a high-quality and valuable product, the more chances you gain to be the first.
However, the question "How much will it cost to develop?" is just as vital as "How long will it take to develop?". Given that no project is the same, estimating the cost of healthcare software engineering is inherently difficult. Each product development is unique. In this regard, there is no magic formula with which you will know the exact figure: time and cost.
Rather, this article focuses on factors that should be considered when making a reliable estimation.
2 Questions to consider before determining the price
These two essential questions should guide you through the process of cost estimation:
- What is the goal of your project?
The first place to start is to define a clear project goal, or in other words, what product are you going to release? With a clearly defined purpose, the whole team will stay more focused and coordinated, allowing to minimize unwarranted time and money resources.
- Who is this project for (= who is your audience)?
It is better to spend some time examining the future user, market, and competitors than to release a top-notch but useless product that nobody but your team needs. By conducting a thorough analysis and considering potential scenarios, you are more likely to avoid wasting time and money.
Based on the answers, you can move on to consider the product itself, its feature set, tech stack, team, etc.
Key factors affecting the product development cost
#1 Product type
Here it's simple: according to the identified model of the potential user and a set of future product features, you can determine the tech model of your solution. It can be a mobile app (Android and/or iOS), a web platform, integration into an existing legacy system, etc.
#2 Product size
Timing and cost are directly related to the software scale and the user base size. The former refers to the number of screens (aka pages), while the latter - to the number of potential users.
This way, your project can be:
It can be a site with a few pages or an application with a small set of basic functions.
The approximate cost range of such development is $10,000 to $50,000.
The number of functions (aka pages, screens) can grow to 5-8.
The approximate cost range of such development is $30,000 to $100,000.
- Large scale
This can be a pharma marketplace, a corporate platform for a healthcare institution, an application for three platforms (Android, iOS, and web), or an educational platform with additional tools for medical students, e.g. Remedium .
The approximate cost range of such development is $80,000 to $200,000.
#3 Team size
The type and project size are determined. It's time to think about the team that will be the backbone of a successful product rollout.
Your team should include at least 4 specialists: a developer, a project manager, a tester, and a designer. However, when dealing with a medical product, the team must also include a med-related person. Depending on the product role, it could be a doctor, a medical student, or a person who is familiar with all the legal and regulatory issues regarding digital medicine.
Here is a sample set of specialists for a well-staffed team:
- Project Manager
- Developer (at least one frontend developer and one backend developer)
- Business analyst
- Quality assurance engineer (QA)
- UI/UX designer
- Database expert
- Tester (there may be several, depending on the type of testing)
- Marketing-focused person
- A healthcare-oriented person who knows the industry inside out.
What’s more, the hourly rate of each specialist affects the total cost of solution design. On top of that, the cost depends on the specialist's expertise and his or her geographic location.
For example, here is a rough estimate of the hourly rate for developers given their geographic location:
Hourly rates aren't the only thing that defines the final price. It is also affected by:
- The amount of technology used
- Tech stack quality
- Approximate cost of post-release product maintenance, etc.
Methods for calculating development costs
This method consists of collecting data from similar previously developed projects. In this approach, companies most often use the Delphi method of cost estimation . The participation of several experts who have worked on similar projects before is a prerequisite for this method. Then, the evidence-based data collected, backed up by expert opinions, is applied to estimate the rough cost of your product design.
This approach is defined by the evaluation of costs from different points of view and the interrelationships of the various elements and parameters of the project. It is a sufficiently flexible method for making prompt decisions in the scope of a large-scale “multifaceted” project.
The Constructive Cost Model (COCOMO) is often used within this method. It involves a regression formula, the parameters of which are determined based on historical project data and the current project features .
This method of estimating time and cost is based on dividing a task into several elements. Then a normative time is applied to each element/operation, using the information gained from experience. Accordingly, this method requires a specialist who has a deep insight into each operation and can estimate the time and cost of each process based on his or her experience.
Conclusion: proven tips for planning your medical project
#1 Break down large tasks into smaller ones
A complex task is made up of small tasks, so split the project into smaller tasks and describe each of them for greater efficiency.
For example, the "landing page" task can be divided into the following minor ones:
- Sketch creation - 2 hours
- Detailed prototyping - 3-5 hours
- UX copywriting - 4-6 hours
- Prototype visualization and implementation - 8 hours
Note: This task breakdown assumes that by the time you start sketching and prototyping, you will already have analyzed your competitors and known your audience.
#2 Stay in constant contact with the entire team
This is especially true when communicating with developers. Alan Cooper, an American software designer, mentioned many times in his book "The Inmates are Running the Asylum" how important it is to interact with developers regularly. Indeed, this way, your team has a better chance to get a broader view of the future product, team up around one thing, and build a future-proof product without spending extra time and money.
ProTip: Make sure your technical team is up to date with all the necessary information and understands your expectations for the project.
#3 Keep additional development steps in mind
Regular revisions, product testing after each stage, bug fixing, deployment, pre-launch and post-launch marketing strategies, and ongoing maintenance are also essential phases of product design. Moreover, each of them requires an expenditure of resources, and failure to take them into account at the planning stage can have a detrimental effect on your solution implementation.
#4 Rely on experts
For more than 7 years, Brandmed has been helping projects to succeed and launch within the global digital health market. A fully staffed team with medical knowledge consisting of frontend and backend developers, designers, marketers, clinical expertise specialists, and others will help you develop your product without any extra costs.
Let's advance digital health together! Contact us, and we'll discuss your product's takeoff plan in more detail.
- Remedium, https://remedium.md/, [last accessed: 19.01.2023].
- Corporate Finance Institute, Delphi Method, https://corporatefinanceinstitute.com/resources/economics/delphi-method/, [last accessed: 19.01.2023].
- GeeksforGeeks, Software Engineering | COCOMO Model, https://www.geeksforgeeks.org/software-engineering-cocomo-model/, [last accessed: 19.01.2023].
- Epam anywhere, How to Calculate Software Development Costs, https://anywhere.epam.com/business/guide-on-software-project-cost-estimation, [last accessed: 19.01.2023].