How Much Does An App Cost?
A montreal-based newspaper recently released a new mobile product to read news. It’s very nice, but it cost them 40 million and took 3 years to ship, with some 100 people on the team. My company has enough experience with news corporations and other industries to know that there was a lot of waste. My associate stated on social media that he could save them millions on their next project. It’s what we specialize in: generating millions in ROI for our clients.
Without hesitation, developers of that product reacted. They were outraged, saying that the budget was entirely justified due to the complexity of the project. The fact that they felt targeted at all is a bad sign, because we certainly didn’t set out to lay blame. To deny that anything at all could have been done better is a lie to oneself and to the client. Have you ever finished a project thinking how things could have gone better? Hopefully you always do. I have been in the field since 1997 and I still improve.
So why would a developer fervently defend a ridiculous budget and what does it mean to the company?
Such a reaction is mostly due to an inflated ego. Everyone likes to think that their project is ultra-complex, the hardest thing ever built. But complexity is relative to one’s experience. An information system built on PHP with a mobile app on top is hardly worth 40 million unless a lot of the money was spent unwisely, in one way or another.
Regardless of what caused the project to blow out of proportion, the fact that people would defend such a big budget should alarm the company. What it means is that these developers would gladly use up all of the company’s resources if they could justify it. It means that they’re too good to have done anything better. It means that they would turn down expert advice even if it meant saving a lot of money for their client.
Why not save money? After a quick research into the names of the developers who replied, it turns out that they are all contractors, not employees. Indeed, longer projects gives them job security. Should an expert come in and find ways to cut production time in half, they would be looking for a new “job” sooner. Not all contractors act this way, but these clearly don’t have their client’s best interests at heart.
That does not mean that companies should not hire contractors. It means that it’s always better to have an expert on board who can see problems before they happen and who can save the company some 20 million or more. Don’t ignore your ROI. Don’t be the John Carter of IT.
Valid points. However, you’ve left out one important variable; what was the actual return on the app? Without that number, saying “x was too costly to create” or “the ROI is not justified given x”. Well, okay, I suppose that could hold true if the return is less than the investment.
One side note: just because this project was a loss, it still doesn’t say much in the grand scheme of things. For instance, this project could have been “a 3 year pilot” for something else. In that case, a loss can still be justified. There are too many possibilities here. The project that is a loss can still be a gain by other measures. It can simply be a reason to deter or cause trouble for their competitors.
Capadisli The ROI is still unknown, because it was launched only last week. I understand what you’re saying, but less cost to achieve the exact same business goal is always better. I have worked on enough projects in this industry to say that these companies waste tremendous amounts of money. It makes me sad that they turn down expert advice so often. I have seen many contractors create artificial problems or overarchitect to prolong a project and milk the cow dry. With an expert, they would save a lot of money. That was my point.
I agree a lot with you Anna, something smells fishy… Even extremely complex management solutions can often cost a few millions but here, we are practically talking about a CMS that can easily adapt to multiple devices… I’m thinking responsive web design, CMS and a few internal systems to ease deployment of articles… This shouldn’t cost 40 millions… nowhere near it!
It’s a lot of money, but it doesn’t have to be developers’ fault. I am used to weird specifications like “make it work i don’t care how”. So you have to spend time with other developers to do job for your product owner – wasting time. Anyway, when you finish the job and ask him to look over it then everything is wrong and he wants everything changed… not only that… changed and improved over your concept.
This tends to lead to time waste. Not only that, team morale is going down as well… and the productivity of the team follows the morale.
You are right that everyone’s goal should be to improve himself or herself. There are always other ways how to do your job and lot of them are better. There is no developer on this world who can say that this approach is the best. Like with singletons… such great pattern, everyone knows it… today it’s an anti-pattern which you should avoid.
Hlaváč As I said in the article, we didn’t set out to lay blame. That would be pointless. People reacted to a tweet that had nothing to do with them. This article analyses the reaction and its meaning. In this project, developer attitude is clearly a problem, but there’s certainly more to the story.
When we monitor or rescue multi-million projects, we search for the root cause and come up with solutions. Unclear specifications and lack of focus are other common issues which can be easily fixed.
Stating that a project could have been done in half the time and half the cost is somewhat outrageous. Since on average most projects (some 80% as i recall) are done way over budget and way over time. If a project, an agile one from what i gather is done on such a big budget then maybe it is because it has involved so many ressources in IT both internally and externally as well as most other parts of the company. Don’t forget you don’t put a 100 person team working on Apple Tech without having some capital expenditure: Macs, iPads and such plus all the servers and backend needed to distribute large data volumes daily, we’re talking about a newspaper here not just a wordpress blog.
Collin You said it. Most projects are way over budget and we know just how to bring projects back on track. If the company wants ROI instead of excuses, they know where to find us.
Hi,
I was stumbling upon and got on your article. It is interesting. Being a developer for many years, I’ve been often part of what I was considering large projects… until now…
However, what I have learned from all those years is to be cautious. For example, when I refactor old code, I try to understand why it is like that. That may hide unspecified business rules. When I find out those business rules that I realize I was judging quickly. With that in mind, I am cautious tu judge. I seeked for information on the net and here is my thoughts:
According to this article: http://www.lapresse.ca/arts/medias/201303/20/01-4633052-la-presse-sera-offerte-gratuitement.php
40 millions is not just about the software development, but also the R&D. That involves really important business decisions. These decisions are not always easy to take and sometimes involve expensive analysis. It is far beyond software development. It is about searching for a business model. The future of newspaper is not good (http://en.wikipedia.org/wiki/Future_of_newspapers). Investing in finding the right business model may be worth it. Play the game correctly or die…
Also, in the article, they talk about other daily newspapers (Le Soleil, Le Quotidien, …). They have a portal on the website, but I can’t find them in the app. I don’t (and hope) they won’t close them. I guess they have plan for them.
Being curious, I searched about their developers reaction you are talking about. Your associate is ? I found tweets about it. Yes they were on “defensive” and it was free. I tend to be on “defensive” with my “babies”, I guess it is the same for them.
You are right that the code may require some (or a lot of) refactoring as well as it may be overdesigned. We can only assert it if we see it.
I like to be the “avocat du diable”. I don’t justify them neither endorse them. Although it is 40M (damn!) project, I am cautious. I would like to be there and see from my own eyes what that involved. There is often reasons we don’t see at first sight from outside. The more I read about it the more I find potential reasons of cost inflation…
SU
You won’t find much trace on Twitter because they deleted their replies. All costs can be lowered, not just the development ones, as long as you have experts to challenge decisions and help focus on value. No project of that scale should cost 40 million. I will be writing a follow-up post soon.
I’m pretty sure that the cost also include building 2 television studios for the video content. These are not cheap.
This number (40M) implies many more expenses than just the iOS development. It is just the tip of the iceberg. Building restoration, studios, servers, branding (do you know how much it costs), ads, equipment, research, R&D. Just don’t pretend you can half something you don’t understand, it childish and pretentious.
La Presse just released today some numbers, 135 000 subscribers since launch, and growing. If these translate from we have to print 135 000 less daily newspapers every day, then I guess the paper and printing and distribution savings will most probably allow them to “recover” that investment fairly quickly. With these figures, that’s 49M less newspapers per year, that must be significant pocket change. And a plus (pardon the pun) for the planet.
You can pay a lot less. If you are familiar with it and know exactly what you want, you can let the individual steps of a single developer. You have to take care of course, is that the code is well documented. In addition, the programmer abroad are sometimes four times cheaper.