It is hard to estimate how much a project will cost without analysing the specific requirements and the environment in which the project is being implemented.
In this session we will explore the steps often found in a project and discuss the time involved in executing those steps
Project planning including creative, technical, integration, budgeting, testing and promotion
Setting and agreement of project goals and constraints
Assembling and briefing the project team
Brainstorming creative ideas
Competitor and market analysis
Analysis of business logic (selling, fulfilment, returns)
Wireframing/diagramming of processes and functionality
Agreement of functionality, specifications and plan within budget
Selection of platform, tools and hosting environment
Graphical design (within brand guidelines)
Conversion of design into templates and style sheets
Product modelling and database design
Promotion design and logic
Design of decision support tools to help shoppers select, choose and experience
Writing of all text pages (Terms & Conditions, Privacy)
Design and implementation of CRM integration
Design of customer service processes and systems
Design of testing regime and tools
Implementation within shopping software, CMS or from scratch
Integration with stock and ordering systems
Integration with payment partner
Photography
Collection and manipulation of content
Testing of business logic
Testing with users
Testing for DDA compliance
Cross browser and platform testing
Delivery and training (editorial and CMS)
Promotions and shop management
Design of reputation campaign
Implementation of reputation campaign
Design of PPC campaigns
Implementation of PPC campaigns
Integration of Google analytics and monitoring software
Monitoring of SEO and PPC
Support and management of problems and issues
Changes in requirements following feedback and experience
Not included
Marketing
Selling
Contract negotiations
Project management
Meetings and reviews
Iterations
Client changes of requirements
Technical roadblocks
Questions about budgets
How long would you expect each of these steps to take?
How many people would you expect to be involved with each step?
Do less experienced people cost you less?
What would you expect each person to cost per day?
Is it possible to leave any of the steps out?
Which parts of the project could be outsourced?
How significant is the choice of software tools to this process?
Which of these steps would you expect to be the most expensive?
How can you make the project cheaper?
How can you ensure that you make money on each step (if you are a supplier) or keep the budget under control (if you are a client)?
What would be a typical budget for this sort of project?
Which parts of this process are omitted by clients who choose to use systems such as OScommerce, Shopify, Magento or Amazon Marketplace?
How accurate is this budget?
The following is a fictitious budget open for full discussion but assumes integration with moderately complex back-office systems, strong branding guidelines and the need for an excellent customer experience. No software, database or other licensing costs are included and ongoing costs have not been included.
The budget is shown in person days.
Project planning including creative, technical, integration, budgeting, testing and promotion
9
Wireframing/diagramming of processes, logic and functionality
5
Agreement of functionality, specifications and plan within budget
2
Graphical design (within brand guidelines)
10
Conversion of design into templates and style sheets
5
Product modelling and database design
2
Design of decision support tools to help shoppers select, choose and experience
2
Design of customer service processes and systems
5
Implementation within shopping software, CMS or from scratch
15
Integration with stock and ordering systems
10
Integration with payment partner
2
Collection and manipulation of content
10
Testing for browsers, platforms and DDA compliance
10
Delivery and training (editorial and CMS)
2
TOTAL person days
92
92 days would cost £60k - £100k depending on chargeout rates (and allowing for some project management and contingency)
How much did Market Quarter cost?
http://www.marketquarter.com has been created entirely in my "free" time and is a rough prototype of basic ecommerce store. It is cheaper than a fully designed shop because it uses a basic template, basic product modelling, basic copywriting etc.
Design - 4 days Implementation inside Shopify - 5 days Photography - 3 days Copywriting - included Marketing, management and optimisation - 2 days per month (20 days so far) Training market staff - 1 day
But note: no order integration, manual availability, PayPal, basic product modelling
Total for version 1 - 33 days = £15-20k (at my daily rate)
Ways of making the project cheaper
Initial costs to get Market Quarter running < £2000
Get the client to do as much of the project as possible
Accept a share of the revenue (or the business) instead of fees
Adapt templates etc from other sites
Use low cost solutions such as Shopify or Magento
Do additional work as revenue starts to flow
Consider outsourcing tightly defined parts of the project
How much does a day cost?
Suppose a member of staff costs £25,000 National insurance adds 12.8% (£3,200) Recruitment adds 15% (£3750) Share of rent adds £2,500 Share of bandwidth, computer, desk etc adds £2,500 Other costs (stationary, telephones, travel, entertainment) adds £2,500 Total other costs £14,450 (57% oncosts)
Total cost per day around £200 (and remember that billing for every day is hard)
Most people cost much more: sales (£60k), programming(£40k), design(£30-40k+), creative director(£60k+), sys admin(£35-45k), project managers (£30-40k), account managers (£35-45k).
What do most companies charge?
Blended rates (across all staff) range from £600 - £1200+ per day
How will this appear in the exam?
You need to be able to prepare a "ballpark" budget
You need to show some of the high level steps involved in the project: write down 6-10 steps using the model above
The projects you are likely to be asked about will not be complete rebuilds but could be optimisation or improvement projects: tighter integration, improving customer journeys, improving navigation, A/B testing.
Steps might include: analysis, wireframing, prototyping, building, testing etc but will differ for different projects
You must be able to estimate whether a project costs £100, £1000, £10000 or £100000
You should be able to set out options - looking for ways of doing things more cheaply: for example using a third party service, a mashup, open source software or building from scratch - be prepared to explore the benefits and drawbacks (time, bespoke functionality, reliability)
Don't see eCommerce in isolation but bring in your experience from other courses, jobs and the real world
Sound installation at Vauxhall Ragged School as part of London Open House [Sep 20, 2009]
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About this site
This site is an educational resource, a research project and a publication channel written by Jonathan Briggs, Professor of eCommerce at Kingston University. As well as being Professor at Kingston, Jonathan...
