Reading a software quote
Two quotes for the same project can differ by a factor of three and both be honest. The difference is almost always in what neither of them says out loud.
Compare the exclusions before the totals, because a low quote is usually a smaller scope rather than a better price. A quote that cannot be turned into a list of what is not included is not a quote you can compare against anything.
Start at the bottom of the page
The exclusions section is where the two numbers actually differ. One firm has included content migration, testing on real devices and two rounds of revisions. The other has excluded all three and will price them later, when you have no leverage left.
Read the exclusions first, then the assumptions, then the price. In that order a cheap quote often reads as the expensive one.
The lines that are usually missing
Most quotes describe building the thing and stop at the moment it exists. The work between existing and working is real, and somebody pays for it either way.
- Content: writing it, migrating it, and who supplies it
- Testing on the devices and browsers your customers actually use
- Accessibility, which is cheap during the build and expensive after
- Training for the people who will operate it
- The first month after launch, when the real problems appear
- Third-party costs billed to you: licences, services, transaction fees
A day rate multiplied by days is not a price
Suppose one quote is 60 days at a lower rate and another is 35 days at a higher one. The totals can land within a few percent of each other, and the second is the cheaper purchase if the estimate holds, because you also pay for elapsed time in your own staff hours and delayed revenue.
The number that matters is the total cost of getting to working, including your side of it. Ask both suppliers how many hours they need from your team. A quote that needs three of your people for a day a week has a cost that is not on its own page.
- Your own team's hours, at whatever an hour of their time is worth
- The weeks of elapsed time before the thing starts earning
- Third-party costs the quote passes through to you
- Whatever is in the exclusions, priced later at a worse moment
What a quote you can trust looks like
It states what is included, what is excluded, what it assumes, and what happens when an assumption turns out to be wrong. It has a named person accountable for delivery. It gives a range rather than a single confident number where the work is genuinely uncertain, and says which parts those are.
A quote with no uncertainty declared anywhere is not more competent than one that declares it. It is either a fixed price with the padding hidden, or an estimate that has not been thought about.
Ask the same three questions of every quote
What is not included. What you need from us and when. What happens to the price if we change our mind in week six. Three questions, asked identically, and the answers are more informative than the documents were.
If two suppliers give very different answers to the first question, you are not comparing prices. You are comparing two different projects that happen to have the same name.
What to take from this
- 01Read exclusions and assumptions before the total
- 02A cheaper quote is usually a smaller scope, not a better rate
- 03Count your own team's hours as part of the price
- 04Declared uncertainty is a sign of competence, not of weakness
Ask the question directly
- Should we send the same brief to every supplier?
- Yes, and in writing. Different briefs produce quotes that cannot be compared, and the differences you then argue about are your own.
- Is the middle quote usually the right one?
- Not reliably. The useful signal is not position in a range, it is whether the quote reflects the brief you sent. A supplier who priced something you did not ask for has told you something either way.
- How much detail should a brief have?
- Enough to state the outcome, the constraints and the deadline. Specifying the solution in the brief invites three quotes for the wrong approach.
Related answers
Web development
New builds, rescues and re-platforms, measured against what the site earns rather than against how it looks. The brand system that carries it is built in the same engagement.
Growth transformation
Organic accounts, reputation, lifecycle and conversion run as one programme, with fractional leadership above it for the companies that need the seniority before they can justify the salary.
Bring the decision you are stuck on
A call, forty five minutes, no deck. We will tell you if we are the wrong firm.