Delivering the undertaken project within the predefined budget is one of the biggest challenges for software development firms across the globe. Proper estimation right in the very beginning can lower the risks that might otherwise be associated with a cost-overrun. Its also one of the prime reasons for failure of most outsourced software development projects.
Software Development Costs - Capitalizable & Non-Capitalizable
During a typical software development life cycle, the costs involved increase with passage of time; same is evident from following figure.
Let's also know the various costs involved in software development; briefly classified into capitalizable & Non-capitalizable heads. Under capitalizable costs, direct material costs, payroll related costs, Interest costs , data conversion costs, and system hardware costs are essentially included. Non-Capitalizable costs include costs for research & development, conceptual formulation of alternatives & their evaluation, implementation costs, general and administrative costs besides the maintenance costs.
Software Quality & Cost - A Deep Correlation Between the Two…
Very few companies engaged in this domain know that there is a marked correlation between quality & cost. After all, at times the logical phrase “You get what you have paid for” should be true as it means paying for the quality that you were expecting. However, in reality, things are more complicated that that.
Cost of software development is affected to a great extent by brand, culture and competition. But its never true that a high cost project will have a lower probability of failing as there are other factors that govern a project’s success or failure. Under-specified product specifications, bad communication skills besides some other factors are some of these.
Most software development companies try to keep these elements within their control. However, still there are some mistakes made at different levels that cause project failure; inability to understand client requirements being one of the most crucial reasons.
Software Development Costs - Capitalizable & Non-Capitalizable
During a typical software development life cycle, the costs involved increase with passage of time; same is evident from following figure.
Let's also know the various costs involved in software development; briefly classified into capitalizable & Non-capitalizable heads. Under capitalizable costs, direct material costs, payroll related costs, Interest costs , data conversion costs, and system hardware costs are essentially included. Non-Capitalizable costs include costs for research & development, conceptual formulation of alternatives & their evaluation, implementation costs, general and administrative costs besides the maintenance costs.
Software Quality & Cost - A Deep Correlation Between the Two…
Very few companies engaged in this domain know that there is a marked correlation between quality & cost. After all, at times the logical phrase “You get what you have paid for” should be true as it means paying for the quality that you were expecting. However, in reality, things are more complicated that that.
Cost of software development is affected to a great extent by brand, culture and competition. But its never true that a high cost project will have a lower probability of failing as there are other factors that govern a project’s success or failure. Under-specified product specifications, bad communication skills besides some other factors are some of these.
Most software development companies try to keep these elements within their control. However, still there are some mistakes made at different levels that cause project failure; inability to understand client requirements being one of the most crucial reasons.
