Counting the cost of software development hours
Today I will talk about a sore subject for both software buyers and the provider of this service - the cost of development. It is clear that now is not the best time to scatter budgets. Only this does not mean that manufacturers should work at a loss. Many people talk about the greed of entrepreneurs, but I'll tell you what: there is no shame in doing honest business and adequately counting your bones.
Our company is developing a Russian software for video communications - which, you guessed it, is not an advertisement here. Not cheap, not expensive; standard, high-quality software. Integration with hardware solutions, flexibility, clouds - everything your heart desires. Literally at the end of last year, we understood that a chapter on economic feasibility should be added to the commercial proposal. So that all questions are dismissed at once, in order to save time for ours and our customers, because again: time is money.
It turned out that clients really do not understand how much it costs an hour of work of a highly qualified developer with a constant market official salary. Sometimes customers are guided by the price lists of freelancers. We have nothing against them, but they are completely different guys.
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At first, we hoped to find some method of calculating the cost of software development in open sources, but failed because no one had made such calculations.
So we did not take the time and did everything ourselves. The final formula turned out to be universal and surprisingly simple:
Hour = ZP / 36 ,
Where the RFP is the average salary of the development team, including the manager, employed in the project, and the number 36 is the calculated ratio of the cost of development hours to the developer's salary.
To avoid accusations of unfounded, here is a completely transparent rationale.
The scope of work on the development of software turned out to be this:
• requirements analysis, design capabilities;
• architecture and interface design;
• development of documentation and integration plan;
• encoding and assembly;
• product test;
• installation, qualification test;
• maintenance (refactoring, correcting code, versioning support) - 30% of capacity.
About 30% of the capacity of say separately. Many development companies do not include support in the scope of work and, accordingly, in the final cost. As a result, the customer additionally pays for any bug, for the slightest correction of the code.
We prefer to work with a high degree of responsibility, to supply customers with, so to speak, “turnkey software” and provide full technical support, because it is not serious to develop complex software, working on the principle of outsourcing. In our experience, customers would rather agree to pay for support beyond what was required than to charge themselves with the problems of maintaining the code.
We return to the methodology.
Remuneration includes:
salary, including income tax 13%;
bonus - without it anywhere: I did everything on time, the client likes it - get a bonus;
payments to the pension fund and social insurance fund 14% (social tax for software developers is preferential).
Medical insurance 1% of the salary;
Food compensation 2% of salary (seriously, we have it).
The number of working days per year was taken from the production calendar, subtracted 20 days of vacation and divided by the number of months. On vacation, people do not work, but vacation pay is paid. Happened
(247-20) / 12 = 18.9 ... days on average, the employee works per month .
We believe that in a full working day is 8 hours. Here we are faced with the task of understanding how much money we spend on employee pay per hour of development. In addition to developers, testers, designers and implementation teams are involved in product development. The ratio of their salaries is as follows:
Testers - 50% of the salary of developers.
Employees of the implementation department receive the same amount as the developers.
Designers - 75%.
Developers average 2.4 hours per day accompany the code, and 5.6 hours per day develop it. Testers - similarly spend 5.6 hours on development. Designers and implementers are engaged in all 8 hours a day in their work, anticipating and completing the development.
For example, we take as a basis Java salaries for programmers according to the Superjob.ru portal - 120,000 rubles per month - and make up a calculation of the cost estimate for the employee’s hour of work per hour of development:
It is clear that people should sit somewhere (at least on chairs, but in general it would be nice to put these chairs in a conditioned room), work with decent equipment, have good communication channels for working with external applications, servers, commands. Employees should look for someone, someone - to consider their salaries, someone - to follow the office and so on. High qualification of employees entails a certain level of costs for their maintenance and administration. Factors such as “conditions” and the social package on the labor market play an important role. All these considerations led us to the fact that general economic and administrative expenses should be included in our methodology. We considered them in fact over the past six months and divided by the number of production personnel, it turned out 20% (relative to the salary of the developers).
The development cycle involves the following points. To ensure that the developer works for an hour, the designer must spend about a third of an hour designing requirements, a tester working on testing for half an hour, and so on. All this is clearly shown in the table, and the conclusion is obvious from it: an hour of direct development requires an hour of additional costs.
Note that the technical writers who prepare the documentation, receive the same salary as testers.
The final touch is - round up to 36 and we can, with a clear conscience, write the formula from the beginning of this publication.
Hour = ZP / 36
The exact determination of the cost of development hours in rubles depends, therefore, on the salary that the developer receives in a particular company. If, for example, according to Superjob.ru data (120,000 rubles per month), then the developer’s labor hour will cost an employer 3,342 rubles with VAT.
In conclusion, it should be noted that the cost of development for the customer is certainly higher than the cost price. The standards of profitability - the question is already purely individual.
It would be great if this information is useful not only for us.
Our company is developing a Russian software for video communications - which, you guessed it, is not an advertisement here. Not cheap, not expensive; standard, high-quality software. Integration with hardware solutions, flexibility, clouds - everything your heart desires. Literally at the end of last year, we understood that a chapter on economic feasibility should be added to the commercial proposal. So that all questions are dismissed at once, in order to save time for ours and our customers, because again: time is money.
It turned out that clients really do not understand how much it costs an hour of work of a highly qualified developer with a constant market official salary. Sometimes customers are guided by the price lists of freelancers. We have nothing against them, but they are completely different guys.
')
At first, we hoped to find some method of calculating the cost of software development in open sources, but failed because no one had made such calculations.
So we did not take the time and did everything ourselves. The final formula turned out to be universal and surprisingly simple:
Hour = ZP / 36 ,
Where the RFP is the average salary of the development team, including the manager, employed in the project, and the number 36 is the calculated ratio of the cost of development hours to the developer's salary.
To avoid accusations of unfounded, here is a completely transparent rationale.
The scope of work on the development of software turned out to be this:
• requirements analysis, design capabilities;
• architecture and interface design;
• development of documentation and integration plan;
• encoding and assembly;
• product test;
• installation, qualification test;
• maintenance (refactoring, correcting code, versioning support) - 30% of capacity.
About 30% of the capacity of say separately. Many development companies do not include support in the scope of work and, accordingly, in the final cost. As a result, the customer additionally pays for any bug, for the slightest correction of the code.
We prefer to work with a high degree of responsibility, to supply customers with, so to speak, “turnkey software” and provide full technical support, because it is not serious to develop complex software, working on the principle of outsourcing. In our experience, customers would rather agree to pay for support beyond what was required than to charge themselves with the problems of maintaining the code.
We return to the methodology.
Remuneration includes:
salary, including income tax 13%;
bonus - without it anywhere: I did everything on time, the client likes it - get a bonus;
payments to the pension fund and social insurance fund 14% (social tax for software developers is preferential).
Medical insurance 1% of the salary;
Food compensation 2% of salary (seriously, we have it).
The number of working days per year was taken from the production calendar, subtracted 20 days of vacation and divided by the number of months. On vacation, people do not work, but vacation pay is paid. Happened
(247-20) / 12 = 18.9 ... days on average, the employee works per month .
We believe that in a full working day is 8 hours. Here we are faced with the task of understanding how much money we spend on employee pay per hour of development. In addition to developers, testers, designers and implementation teams are involved in product development. The ratio of their salaries is as follows:
Testers - 50% of the salary of developers.
Employees of the implementation department receive the same amount as the developers.
Designers - 75%.
Developers average 2.4 hours per day accompany the code, and 5.6 hours per day develop it. Testers - similarly spend 5.6 hours on development. Designers and implementers are engaged in all 8 hours a day in their work, anticipating and completing the development.
For example, we take as a basis Java salaries for programmers according to the Superjob.ru portal - 120,000 rubles per month - and make up a calculation of the cost estimate for the employee’s hour of work per hour of development:
It is clear that people should sit somewhere (at least on chairs, but in general it would be nice to put these chairs in a conditioned room), work with decent equipment, have good communication channels for working with external applications, servers, commands. Employees should look for someone, someone - to consider their salaries, someone - to follow the office and so on. High qualification of employees entails a certain level of costs for their maintenance and administration. Factors such as “conditions” and the social package on the labor market play an important role. All these considerations led us to the fact that general economic and administrative expenses should be included in our methodology. We considered them in fact over the past six months and divided by the number of production personnel, it turned out 20% (relative to the salary of the developers).
The development cycle involves the following points. To ensure that the developer works for an hour, the designer must spend about a third of an hour designing requirements, a tester working on testing for half an hour, and so on. All this is clearly shown in the table, and the conclusion is obvious from it: an hour of direct development requires an hour of additional costs.
Note that the technical writers who prepare the documentation, receive the same salary as testers.
The final touch is - round up to 36 and we can, with a clear conscience, write the formula from the beginning of this publication.
Hour = ZP / 36
The exact determination of the cost of development hours in rubles depends, therefore, on the salary that the developer receives in a particular company. If, for example, according to Superjob.ru data (120,000 rubles per month), then the developer’s labor hour will cost an employer 3,342 rubles with VAT.
In conclusion, it should be noted that the cost of development for the customer is certainly higher than the cost price. The standards of profitability - the question is already purely individual.
It would be great if this information is useful not only for us.
Source: https://habr.com/ru/post/256537/
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