It's natural for clients to want to know how much a new product development project will cost. It's a significant number, and it can be scary. Often, we don't know how high that number will be. But we're here to help ensure they understand the costs and what they're getting for their money.
This article will outline some hidden costs and risks you can expect to pick up along the way. We want to be honest with you about what we know and what we are still working out. We also want to give you as much information as possible so that you understand our product development process. This way, there will be no misunderstandings in the future.
The uncertainty of product development projects
Innovolo offers a complete product development service from initial idea generation to commercialisation. It's a very hands-on process, with our developers working alongside our clients' teams during all the key milestones.
Such intensive projects can feel like a "black hole" for clients, who may feel unsure about what they're getting into. Of course, this uncertainty doesn't make them any less keen to ensure they get value from their investment, but we can understand their concerns and want to alleviate some of these worries.
While we will try to provide you with the best product development service possible, there are some things that we can't control. Sometimes, our clients might ask us to do something that takes the project slightly different direction. These things could affect how much your product development project ends up costing.
This means that it's challenging to provide you with a detailed cost estimate without knowing all the ins and outs of your product development project. For Innovolo to create an accurate and comprehensive estimation, we need to know precisely what you plan to do with your product.
We can't give you an exact answer about how much it will cost because many of the final costs are dependent on one another. So instead of giving you a fixed quote, we will ask you to invest in a Discovery Phase.
This does several things:
- It lets you gain a good understanding of the product development process.
- It allows us to assess your project's difficulty level; this will help us estimate more closely how much time and expertise we need for its completion.
- It will help to gain commitment from all parties involved. We have a commercial interest in ensuring your idea is a success for you; we're not interested in developing products that flop. If you've invested some cash and time in this project, you're more likely to want to follow through and see your idea come to fruition.
What can you expect during the Discovery Phase?
The Discovery Phase is broken into three main parts. First, it's a more interactive process where we'll ask you many questions. We have to know what you're trying to achieve. This way, we can define your idea and assess its feasibility as well as the level of effort required for us to bring it to life.
Part 1: Free of charge initial discussion
This is a 30-minute meeting with you and our experts, allowing you to explain your idea and better understand what would go into making it a reality. In addition, this discussion aims to establish your main objectives and goals for this project.
Part 2: Business Case
Based on your input, we will create a draft business case, a project brief, and the project product description.
The draft business case
- identifies the underlying business fundamentals which gave rise to the project;
- it determines the expected return on investment analysis, reasons for undertaking the project, expected benefits; and
- It includes the various business scenarios and their financial analysis.
This will help you or your Board of Directors to make an informed decision about whether the project makes sense.
Next up will be the project brief.
The project brief is a document that explains what the project needs to achieve. It includes the project's reason, what it should do, what isn't included, and how well the project should do. The brief is created before planning for a project starts and is used by Innovolo to ensure the project is set up for success.
The last document that you'll receive is the product description.
Every project produces a unique product or service, so it is essential to describe what the project will create. Sometimes it is clear what the goal is, but in many situations, we need to review and focus on the result. The quality expectations of the final product should be discussed and analysed in enough detail to ensure that it is acceptable. The acceptability criteria should be agreed upon and stated in the product description to ensure that the goalposts don't move mid-project.
Part 3: Project Initiation
The Project Initiation Documentation (PID) is the third part of the Discovery Phase; this is where we will plan the steps, when they will happen, how much they will cost, and what we need to do to ensure the project is a success.
The PID would typically include some or all the following:
This is where we can do a more in-depth analysis of your idea and assess the work required to develop it. You'll receive a definition of the project mission, long-term vision, and primary objectives. We will use your inputs to study and analyse strategies for achieving your long-term vision.
This is where we'll discuss how we might perform each task and what tools and techniques we may use.
Updated Business Case.
We would also update the business case based on your input.
Project Management Team Structure.
We will discuss the project management team structure, including an"org chart" or visual representation of the team's organisation.
This is where we will discuss the roles and responsibilities of each member of your assigned project team.
Quality Management Approach.
This is where we will discuss our quality management approach. We believe that a proactive 'Prevention' approach is the most effective way of ensuring quality, which we will cover in these documents.
Change Control Approach.
Change is inevitable in a product development project. This section will discuss how to address changes and the procedures for initiating, managing, monitoring, reviewing and closing changes.
Risk Management Approach.
Projects can get off track very quickly. This section will discuss the project risks and how we'll deal with them throughout the product development process.
Communication Management Approach.
Ensuring everyone is on the same page is critical to a project's success. This section will discuss the project communication approach and how we will ensure that everyone understands what they need to do and what they can expect from one another.
The project plan is where we'll list the tasks that must be completed to make your product or service successful, including work packages, activities, milestones, deliverables and deadlines.
This is where we'll discuss the project controls, which will outline how the work on your project will be monitored and measured.
Once we complete the Discovery Phase, a high-level estimate is available for the cost and timescales for your project.
Typically, fully managed end-to-end product development projects with Innovolo cost in the region of £50-250K. Committing to a Discovery Phase will limit your risk for the project and give you a breakpoint where you can decide whether to continue or not.
How much will it cost to develop my product?
This is a difficult question without fully understanding your product development requirements. In our experience, most product development projects cost between £50-250K.
What can I expect to save in development costs by working with Innovolo?
Innovolo has a team of product development, design, and engineering experts. We have a proven process for taking products from concept to market quickly and efficiently; this means we can save our clients 20-30% in development costs.
How much will it cost to produce my product?
This will depend on the production process and volume. In general, the cost of production decreases as the volume increases.
How much will it cost to distribute my product?
This will depend on the distribution channels that you use.
What overhead costs can I expect with my product development project?
A few overhead costs are associated with product development projects, such as project management, discovery, and design. However, these typically account for 10-15% of the total project cost.
How much will it cost to patent my product?
The cost of patenting a product varies depending on the country and type of patent. In general, patents cost between £5-10K.
What other costs should I expect during my product development project?
You may incur other costs during your product development project, such as travel and prototyping costs. These typically account for 5-10% of the total project cost.
How can I save on costs during my product development project?
There are a few ways to save on costs during your product development project, such as by working with Innovolo. We can typically save our clients 20-30% in development costs. Another way to save on costs is to use open-source components and tools wherever possible. This can help you avoid licensing fees and save on development time.