Evaluation of labor costs in web and mobile projects

There are situations when a customer company needs to calculate the timing of an IT project as quickly as possible – for example, at the start of negotiations with investors. However, even a quick assessment should contain all the upcoming labor costs: development, testing, management and possible risks – a risk reserve. In this article we will look at the assessment process using the example of web and mobile projects.

How the project is evaluated

Detailed assessment is a labor-intensive process that involves experts from different disciplines. For example, in our practice this is a group of 5 specialists – developers, analyst, designer. The group is headed by a moderator who makes sure that the assessment is correct and meets the needs of the customer. Moderator’s tasks:

  • call the client to clarify requirements, agree on solution options and technology stack;

  • oversee the assessment process;

  • suggest implementation options;

  • evaluate and lay down risks;

  • determine the composition of the development team;

  • draw up a preliminary roadmap of the project.

Detailed score takes on average 3-5 working days… During this time, we determine possible limitations and risks, the technology stack, the composition of the team, the estimated time frame and its cost. After that, we move on to discussing the assessment with the client. According to our observations, at this stage, various refinements can occur for the following reasons:

  • the client’s requirements have changed, for example, he has prepared a more detailed technical specification and layouts;

  • the need to implement the product in stages, starting with the MVP, taking into account the budget or deadlines was identified;

  • sometimes it is necessary to change the technology stack if the client communicates new business problems or infrastructure features.

Risks and labor costs for management

When evaluating, you need to consider labor costs for project management (Project Management – or PM), including:

  • distribution and control of tasks

  • holding meetings;

  • communication with the customer of the product and elimination of obstacles;

  • retrospectives with the team;

  • demo with a customer;

  • work with metrics and risk assessment.

During the implementation of the project, the project manager monitors any risks that may affect the timing and cost of work. However, some risks can be identified already at an early stage, for example:

  • the team often rework, and more than 10-15%;

  • TK is constantly changing, and test documentation is not updated;

  • the actual time to complete the task is much longer than planned.

In general, working with risks is a topic of eternal debate about how to minimize them and how to make calculations correctly. Let’s see how labor costs can differ, using the example of two types of applications from our practice.

Evaluation of labor costs

When developing certain new modules, the team will have to perform various types of work, depending on the type of project:

  1. Application acceptance

  2. Analytics and design

  3. Direct development and integration with other IT systems

  4. Testing and quality assurance (QA)

We set ourselves the task of finding out how, on average, labor costs are distributed over development phases. To do this, we analyzed a selection of web and mobile MVP projects developed in 2020. Labor costs for their implementation ranged from 2000 to 4500 hours.

Web application

We calculated the ratio of labor costs for different types of work in these projects (in percentage):

  • Analytics – 7%

  • Backend – 30%

  • Frontend – 24.6%

  • Testing – 15%

  • Management – 22%

As practice shows, development takes about 50-60% of the total implementation time of a web application.

Thus, you can very roughly count the hours directly for development and multiply them by 2 in order to estimate as a first approximation how much time you will need. At the same time, of course, it is advisable to evaluate each project individually, taking into account its technological stack, level of complexity and other features.

Mobile development

The picture is slightly different if your product is designed for smartphones and other portable devices. To analyze labor costs, we took a sample of mobile projects in which we performed development for Android and iOS. In doing so, we proceeded from the assumption that the administrative panel in all projects was based on standard components of the development framework.

In web projects, labor costs were distributed as follows:

  • Analytics – 3.8%

  • Backend – 18.9%

  • iOS – 16.1%

  • Android – 25.8%

  • Testing – 25.1%

  • Management – 10.3%

We estimate that backend and mobile development averaged about 60% of labor costs.

Compared to web applications, mobile projects are often more time consuming due to implementation and testing on multiple platforms at once. The testing time for them is on average 10% higher compared to web projects, because the fleet of devices is constantly growing.

Features of calculations

You can calculate the development time using various tools, including manually in Excel. For us, the most convenient method was the automation of calculations, for this we have developed our own service Estimate, about which already told on Habré. This service allows you to connect templates and take into account the peculiarities of each type of project. Using the service, you can calculate how many hours are needed for each phase or stage of development, for the implementation of individual features.

Estimate evaluation example
Estimate example

Conclusion

In this article, we calculated the features of the distribution of labor costs in different types of products. In our web projects, development averaged 50% of the total labor costs, and in mobile projects – about 60%.

At the same time, our sample is based on custom development, most of the projects were implemented in MVP format, so such calculations may not be suitable for other types of projects – for example, with long-term support. It goes without saying that each project is individual and the distribution of hours can be different everywhere.

We hope that our experience can be useful in predicting risks, when conducting a high-level assessment, as well as for checking calculations at the start of a project. If the project is underestimated at this stage, you can re-evaluate and adjust labor costs in order to complete the work on time with the full team.

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