The verdict in three sentences
When a mid-market CIO receives 4 quotes from £35,000 to £140,000 (CAD 60,000 to 240,000) for the same application, it is not that three vendors are lying: the requirement was never sized before the tender. An internal estimate using user stories or function points, even with a plus or minus 30% margin at scoping stage, lets you discard unrealistic bids and compare the rest on a common basis. A discovery workshop of 3 to 10 days and a risk contingency of 15 to 20% cost far less than a project that overruns by 50%.
Why quotes vary fourfold
The gap between £35,000 and £140,000 almost always comes from implicit scope. The cheapest vendor read "user management" as a login page; the most expensive added roles, delegation, a corporate directory and an audit trail. Both are right, for lack of a specification.
| Source of variance | Effect on the quote | How to neutralise it |
|---|---|---|
| Undescribed implicit scope | Up to × 2 | User story list with acceptance criteria |
| Underestimated integrations (ERP, SSO, payroll) | + 20 to 40% | Inventory of data flows with volumes |
| Missing non-functional requirements | + 10 to 25% | Quantified performance and uptime targets |
| Forgotten data migration | + 5 to 15% | Volume and quality of existing data |
| Testing and change management not counted | + 10 to 20% | Dedicated line in the pricing schedule |
| Risk contingency included or not | ± 15 to 20% | Ask for it to be shown separately |
Two ways to estimate it yourself
User stories are the most accessible method. A mid-sized business application has 60 to 120 of them. Each is sized in complexity points (1, 2, 3, 5, 8, 13), then converted into days using a reference team's velocity. Function points (IFPUG or COSMIC) measure functional size from inputs, outputs, queries and files. More rigorous, they need a trained analyst, but they are recognised in public procurement and fixed-price contracts.
| Criterion | User stories | Function points |
|---|---|---|
| Estimation effort | 2 to 4 days | 5 to 10 days |
| Skill required | Product owner or project manager | Certified analyst |
| Accuracy at scoping | ± 30% | ± 20% |
| Accuracy after detailed design | ± 15% | ± 10% |
| Typical 2026 ratio (order of magnitude) | 0.5 to 1 day per point | 0.5 to 1.2 days per function point |
| Typical use | Agile projects, SMEs and mid-market | Public tenders, large enterprises |
For an application of 90 user stories totalling 320 points, at 0.7 day per point and £550 a day in London (CAD 950 in Toronto), you get £123,200 before contingency. This gives a reference range, not a price: it shows that a £35,000 bid has probably left out half the scope.
What a discovery workshop delivers
A 3 to 10 day workshop brings together business users, IT and the shortlisted vendor. It produces the user story map, the integration list, non-functional requirements and a three-point estimate (optimistic, likely, pessimistic). It is also where you decide what stays out of version 1. That is often where 120 user stories shrink to 70 and the budget becomes realistic again.
For reference, Kolonell's 2026 grid for custom applications runs from 2,500,000 to 4,000,000 FCFA (3,810 to 6,100 EUR) for a simple build, 4,000,000 to 7,000,000 FCFA (6,100 to 10,670 EUR) for a medium build and 7,000,000 to 15,000,000+ FCFA (10,670 to 22,870+ EUR) for a complex one, with maintenance from 35,000 to 120,000 FCFA a month (53 to 183 EUR). The discovery workshop itself is quoted separately depending on its length.
Mini case study
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James, CIO of a 450-employee distribution company in London, received 4 bids: £35,000, £62,000, £82,000 and £140,000 for a customer returns management application. He commissions a 5-day discovery workshop. Result: 78 user stories, 260 points, sized at 0.6 day per point, so 156 days. At £520 a day, the likely cost is £81,120, with a ± 30% range of £56,800 to £105,500. He adds 15% risk contingency, giving a £93,290 budget to commit. The £35,000 bid falls outside the range, and so does the £140,000 one. He compares the two remaining bids against the same user story schedule and finds the £62,000 bid excluded data migration. The £82,000 bid becomes the reference, with £11,290 of headroom under the committed budget.
FAQ
Should we estimate internally before every tender?
Once the project exceeds £25,000 to £45,000 (CAD 45,000 to 75,000), yes. A 2 to 4 day estimate avoids picking a bid that overruns by 50% six months later.
What error margin is acceptable?
± 30% at scoping, ± 15% after detailed design. A vendor claiming 5% accuracy before any workshop is promising something it cannot deliver.
Should risk contingency appear in the bid?
It should be shown separately, usually 15 to 20% of the amount, and drawn down only by joint decision. Otherwise it vanishes into the base price and you lose all visibility.
How many user stories in a mid-sized business application?
Between 60 and 120. Below 40, it is more of a simple tool; above 150, split it into lots or successive releases.
Function points or user stories: which to choose?
User stories for an agile project with a vendor involved early, function points for public procurement or a strict fixed-price contract. Some IT departments use both to cross-check estimates.
Let's scope your project. Send us your requirements or the bids you received, and we will help you pin down scope and timeline before you sign. Detailed quote within 48 h. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
