How we enhanced the projects estimation process post-mistake

Accurately estimating time and budget in a client project is crucial for success. Experienced development teams invest ample time in gathering initial requirements and estimating the project. Unfortunately, mistakes are inevitable at this stage, leading to potential costs for developers and clients alike. However, it's essential to learn from these mistakes and identify areas for improvement and growth.  In a similar situation, the Crypton Studio team faced serious underestimation, resulting in significant time and monetary losses. Nonetheless, this experience prompted vital organizational changes in our approach to estimating new projects. This article delves into our journey of learning from our mistakes. How we underestimated a project by $25K and what it cost us A few years ago, we started a decentralized exchange development project at Crypton Studio. With a portfolio of about a dozen custom DEX projects, this seemed like familiar territory, well within our expertise. At the time, we were working on a fixed-price payment model . Under this arrangement, the project budget is set in stone before work begins, with no room for adjustments after the contract is signed. This means that clients pay for the final product at a predetermined cost within a specified timeframe.  In such scenarios, the responsibility for any estimation errors lies with the development team, not the customer. This is an important point to remember in this story. We conducted our estimates to determine the project's timeline and cost, as is standard practice. But how did we do it, and who was responsible for this crucial task? Our specialists relied on their expertise to estimate the number of hours required for specific functionalities, without project-specific nuances. These estimates were then compiled by a business analyst into a simple spreadsheet, with hours and costs averaged, without any further breakdown by task or functionality. Using this methodology, we estimated that developing the MVP of a decentralized exchange would cost $60,000 and take three months. We wrote the SOW, reviewed it with the client, and started development. But when it came time to deliver the finished project to the client, we were faced with the fact: the terms and budget outlined in the contract were far from accurate.   What exactly went wrong? We underestimated the scope of work. During development, it became evident that an additional 300 hours for backend implementation were required to fulfill the client's project logic. This unforeseen requirement escalated the project budget by approximately 30%, transforming a $60K project into an $85K endeavor. This realization came not during the requirements gathering phase but as the deadline loomed. Development lagged behind schedule, leading to a missed delivery deadline, necessitating an extension by 40%. We'd missed the deadline - development was behind schedule, the project wasn't delivered on time - the new deadline was 40% longer than the original deadline. We could not add changes to the contract - fixed price payment model excludes such an option. Of course, some development teams could compromise and implement the functionality incompletely, and the quality would suffer. But that is not our approach. To salvage the situation and maintain client relations, we absorbed the 30% budget increase with our own resources. The key takeaway? Timely evaluation is paramount. Our initial assessment lacked depth, failing to account for various factors. Additionally, the fixed-price payment model constrained flexibility for both us and our clients, hindering adaptability in unforeseen circumstances. We've often encountered scenarios where clients requested significant changes mid-development, highlighting the need for process enhancement.  Consequently, we initiated changes to our project estimation system and payment model, recognizing the imperative for improvement. For error-free project development, investing in a comprehensive discovery phase is crucial. We offer precise R&D services to assist clients in defining blockchain project requirements and functionalities, saving time, money, and eliminating unfeasible assumptions. Reach out to our specialist to learn more! How Crypton Studio started evaluating client projects  To enhance our project evaluation process, we undertook a thorough audit, aiming to prevent future setbacks. Here's how we revamped our approach: We established a new role, the Presale Analyst (Solution Architect), tasked with conducting a preliminary project assessment and analyzing technical solutions needed. To streamline proposal preparation and accelerate the process, we bolstered our pre-sale department.  Our tech leads spearhead project evaluations, deliberating on various implementation options and recommending the most effective ones, drawing from industry best practices. We recruited additional specialists, including business analysts, designers, QA engineers, and DevOps engineers, ensuring a systematic approach that caters to all customer requirements. In refining our assessment method, we aimed to consider as many factors and risks as possible. We began by delving into greater detail and breaking down tasks into smaller components. Additionally, we introduced the "realistic" estimate, which averages optimistic and pessimistic estimates. To calculate these estimates and their variances, we adopted an expert approach. Specialists estimate project development time based on their experience and project requirements. Now we refused to calculate an average estimate. As our experience has shown, the term "average estimate" does not make sense in custom development. Instead, we focused on tailoring estimates to specific needs. Furthermore, we enhanced our detail-oriented approach by retaining optimistic and pessimistic estimates while introducing the Border & Scope (B&S) document . This document outlines project functionality, development plans, and scope, facilitating preliminary discussions with clients before finalizing cost estimates. For each client, we now prepare three essential documents: 1. Assessment Sheet: This detailed spreadsheet breaks down the work of each specialist, organized into separate sheets for client convenience. It delineates the project into three phases—research, development, and project handover—while specifying the timing and budget allocation for each team involved.  We provide a comprehensive outline of the entire project scope, detailing the tasks and deliverables for each phase of the project. 2. Border & Scope Document: Crafted by our Solution Architect, this document elucidates the project's functionality and rationale behind task assignments. It includes a preliminary project roadmap and budget plan, outlining the project's boundaries, responsibilities, and potential scope expansions. 3. Presentation: A concise presentation summarizing our product development processes, project roadmap, and associated costs for client reference. We firmly believe that precise project estimation is key to success. Unsure about the time and resources needed for your project idea? Schedule a free consultation with our specialist today! Why so many documents, Crypton Studio? These documents offer our clients a comprehensive understanding of the development process and the tasks handled by each specialist, along with the time required for specific functionalities. By delving into detailed evaluation stages, we significantly reduce the likelihood of unforeseen challenges stemming from underestimations. Our internal data indicates that with this approach, budget estimation inaccuracies now remain within a manageable range of 10-15%. Our meticulous estimation process not only addresses client queries but also enables them to provide clarifications before development commences or adjustments are made promptly. This approach ensures our development team's full immersion in the project from the outset, minimizing the chances of misunderstandings and errors. The extensive documentation allows clients to delve into our work and provide feedback on every aspect. Importantly, development begins only after all project details are agreed upon and any changes are approved by the client. In our pursuit of continuous improvement, we've also implemented a more flexible time and materials system alongside revisions to the fixed-price payment model.  This enables us to estimate projects more accurately, especially when requirements are not fully defined initially, and ensures fair payment for the actual hours worked by our development team. Stay tuned for a detailed report on the outcomes of this implementation in a separate article. Conclusion Our estimating process ensures accurate budgets and timelines for projects, achieved through modernizing our methods and finding optimal solutions. By addressing potential variances during the Discovery stage through robust risk management, all parties can effectively plan project development. Despite encountering various challenges, each case has presented opportunities for growth. We take responsibility for our mistakes, prioritizing client loyalty and striving for error-free work through continuous process improvement. As a seasoned development team, we remain committed to delivering top-notch client projects in the web3 sphere. Unlock the full potential of your project with Crypton Studio. Whether you require full blockchain development, project evaluation, or a comprehensive discovery phase, our experienced team is here to assist you every step of the way. Have questions? Contact our expert today for a free consultation. Our website: https://crypton.studio/ Telegram: https://t.me/Crypton_Studio_Dev E-mail: contact@crypton.studio