How Should Software Development Costs Be Calculated in 2024?

How should person-day cost be calculated in the software industry?

For software companies that license a product they have built—like Softomi—quoting custom development on a simple person-day basis is extremely hard. Below are a few analogies that show why.

For example:

You own a football club and you sign a star striker. The player can play the next match a few days later and score.

You own a private hospital and you hire a famous neurosurgeon. On day one they can operate on a patient who has already completed the required tests.

You run a law firm and you hire a senior lawyer. The same day you can hand them a new case file.

You run a garment workshop and you hire a new master tailor. They can start sewing on day one.

You own a private school and you hire a computer teacher. They can start teaching the curriculum on day one.

You run a software company and you hire a senior developer with 10 years of experience! (This is where uncertainty starts.)

To work on a complex product like Softomi’s marketplace software, they may need months of training just to understand the codebase and business rules: how order amounts are split to sellers by commission rules, how campaigns are applied, how data flows into reports, integration with Paraşüt (accounting), reversals for cancellations/refunds, prorated shipping charges, and dozens of linked features—before they can ship meaningful changes.

So the team spends months onboarding the new hire; trainers are paid while they teach; the new hire is paid too; only after perhaps 6–8 months do they become productive—or they may leave, and the investment is lost.