At GIGA4, we provide consulting and development services. In both cases, the essential resource is the time of specialized professionals with expertise in the field.
Our compensation for providing our services is based on the utilization of this resource, and we want you to be informed about the approximate costs that a specific project may entail. This is why, in many cases, we prepare quotations or other types of estimates.
Learn how these estimates work, how we prepare them, and why, on occasion and for certain cases, we cannot provide precise estimates.
Standard Estimate #
There are some types of work for which it is very straightforward to establish an estimate. These are types of work for which:
- We are very accustomed to doing it, and it is a task that can be estimated.
- We are familiar with the development we will be working on, either because we developed it ourselves or because we have already worked extensively with it.
- The work is clearly described and defined.
- We do not depend on third parties (for example, sometimes we depend on another service or company for part of the work. This is common in integrations between services).
- We have previously worked with the client and understand their wishes, objectives, and expectations.
With this knowledge of the environment in which we will be working, the situation allows us to provide a realistic estimate.
As a metaphor, let’s consider the work of a gardener. The gardener is asked to prune a rose garden. A familiar client, with whom they have worked before, calls them, and the gardener knows exactly how this client likes their garden to be. Furthermore, they have previously worked in this specific garden and know its size, how many rose bushes there are, their potential size, where all the tools are, they have all the necessary keys, and they know how well the plants in this garden are cared for. The gardener is very clear that they will spend a 4-hour day pruning this garden, and it will be exactly as the client likes it.
Approximate Estimate #
This would simply be an estimate for work that does not meet one or more of the points in the previous section. In this case, when preparing the estimate, we account for any potential unforeseen circumstances. This is why we inform you about the approximate cost it may entail, but we cannot state it with total accuracy, although we make our best effort to ensure the estimate is realistic and thus fulfills the objective of informing you about the possible cost of the work.
Sometimes we offer this estimate with a price range if we notice it can be highly variable; at other times, we provide a single approximate amount.
Continuing with our metaphor. Here, the gardener has to estimate a budget for a garden they have never been to. They have been told the garden is 50 square meters, but depending on whether the rose bushes are closer or further apart, there will be more or fewer. Additionally, they have to call the previous gardener and wait for them to open the tool shed, and they don’t know if all the tools they need will be available. They also don’t know the condition of the rose bushes or the garden; for example, if they haven’t been pruned in years, it will take more work to prune them now. They are also unaware of other details, such as whether or not they have been treated for infections. Due to these and other details, the gardener estimates that, on average, they will need more time to complete their work and also anticipates that there may be unforeseen events during their work that could extend their workday. Therefore, for this garden, they estimate a workday of 5 to 7 hours.
Spending Cap #
Unfortunately, there are projects that cannot be reliably estimated. This may be due to a greater lack of knowledge about the project environment or a project where external factors will influence the work throughout its duration. This prevents accurate estimations.
In these cases, although it is very difficult to provide an estimate, we can indicate parameters such as a spending cap, which would be an indication of the maximum potential cost.
In this scenario, our gardener is called to a rose garden infected with a pest. They lack much information about the garden, and until they start working on the rose bushes, begin applying treatments, and observe how they respond to different treatments, they won’t know if the problem will be resolved sooner or later. Therefore, in this case, they indicate a spending cap, stating that they believe they will spend a maximum of three 8-hour days in the garden, as this is their estimate for applying and verifying all the treatments they can use.
Direct Hourly Work and Hour Packages #
There are cases where we do not issue estimates and bill directly by the hour:
- Small jobs, requiring few hours, minor changes, details, etc.: Such as small adjustments, brief consultations, recurring changes to a website, out-of-scope changes, etc.
- Large projects that are difficult to estimate due to their complexity, highly flexible projects, projects with significant dependence on third parties, and/or projects that begin in a very undefined manner and evolve or change as progress is made, making estimation impossible.