Monday, 31 July 2023

Case study: estimating the cost of in-house development of mocks

We had a call yesterday with an architect working for a global aerospace enterprise. We discussed the pros and cons of building a mocking tool in-house vs. purchasing off-the-shelf.

He estimated his developer would need around ten days to create the basic version of the mock for one service and then roughly two days a month to maintain it. So, this tool project would take up 34 days of the developer's time in the next 12 months. Roughly a €9,000 ($10,000) cost in the first 12 months (€63k average dev salary / 240 work days a year * 34 days for this project).

This is a very conservative estimate, in my experience, but it's a helpful start.

On top of that, I suggested a back-of-the-envelope calculation, and an employee generates, on average, $1550 in revenue per day for that company ($26b yearly revenue / 70k employees / 240 work days a year). 34 days would be worth roughly $53,000.

So the cost of developing in-house based on these estimations is MAX($53,000, $10,000) = $53,000 for the first 12 months.

So, the ROI of using Traffic Parrot instead of developing in-house is high, even just for the first service he wanted to mock.

On top of that, Traffic Parrot might be considered a low-risk option for the company, as our tool is already working. It has been tested and has been used by companies globally since 2016. The company developer hovever would be starting from scratch with "can it do XYZ" requests from other developers week by week.

Off-the-shelf can also be future-proof. For example, our clients use our tool in different environments ranging from local, CI/CD and shared environments across many operating systems. Over the years, we have developed features that improve the developer experience in all of those cases, which, when you are developing in-house, you might need in the future, even if you do not see it today.

I also suggested considering pulling into the discussion the Director Of Product. He might have more visibility on the cost of those 34 dev days to the product revenue (I believe it's at least 3-5x the average employee number I used above). He might also have a budget to purchase tools if the line manager does not.

Ultimately it's the prospect's call to either develop in-house or use off-the-shelf. We are here to help them make an informed decision by walking around the abovementioned items.

If you want to learn about other options for your specific situation, please contact us