How to Read a Software Development Company's Quote

American businesses are far more inclined to outsource software development today than they used to be. With a number of companies cropping up across the nation and around the world, it has never been easier to get your hands on a solid outsourced software solution. Reading the development company's quote accurately is an essential step in the process, as you want to ensure you know precisely what to expect at each step along the way.

Instructions

Difficulty: Moderately Easy

Things You’ll Need:

• A financial consultant
• A legal consultant
• Secure socket email communication

Read the Quote Closely

1. Look for the biggest number on the page. This will be for the company's entire software development process, unless you have negotiated a daily rate instead. If this figure doesn't fall well within your comfort zone, it is time to cut your losses and move onto a company that provides a quote you can live with.
2. Check for the main software price--usually the second biggest number on the page. Companies tend to vary widely on this figure depending on the kind of expertise and resources they have. This is also the most negotiable figure in the quote.
3. Check for services, including beta testing and re-coding. Depending on your company's quote structure, this figure may also include updates and ongoing support.
4. Check for warranties and any kind of guarantee. If the quote is without any recourse should the product fail, contact the company and see what kind of contractual terms they prefer. This is designed to protect both parties, so be sure to get it in writing before you proceed.
5. Look for ongoing product support that continues after delivery. You outsourced this software development process specifically because your team lacked the skill or the time to undertake this complex process. It is essential that the outsourcing partner give you ready and accessible IT support during use.
6. Check for any marketing costs that may be included. It's not unusual for development companies to take an active role in marrying the software to your brand and helping with its rollout. If you would rather handle proprietary trademarks and marketing on your own, negotiate to have this item removed.
7. Check to make sure the quote you read comes with a reasonable timeline for evaluation. If the window of activation is less than three days, request more time to collect further quotes and consult with your executive team.

Tips & Warnings

• Generally a company's quote will either provide a per-day rate or a total delivery rate. It is essential to understand the difference between the two, as each offers advantages and disadvantages.
• Do not be afraid to mark up quotes before you send them back. You want to start out with everyone quite literally on the same page.
• Read the fine print! It's not unusual for a quote to include certain phrases that allow for too much wiggle room in terms of time, resources and money.

Who Can Help:

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