Last week Banco Popular of Puerto Rico announced that they were almost ready to launch, August 22nd, a new Internet banking website. In the announcement, Banco Popular is claiming that the new website cost $2 million.
Have you ever played this card game were players take turns discarding cards from their hand? The winner is the first person to get rid of all their cards. While there are a few rules for discarding, the fun of the game comes when your opponent doesn't believe you are following those rules and challenges your play. To do so the player must call out, and so am I with reference to Banco Popular's announcement, "Bull Shit!"
I'm sorry, there is just no way, in these days of sophisticated and efficient software development languages and tools, dirt cheap quad-core servers, and cheap bandwidth, that it takes $2 million dollars to build a website. Come on! We are talking about 5 or 10 (maybe 20) web forms, a database, some security, but we are not talking about building a robotic car.
According to the announcement, they built the website internally and the development required one year. Which if I know Banco Popular (or their technology leading subsidiary, Evertec), they probably used Java, which could actually explain why it took so much money, but I digress.
With a napkin project estimate, I determined (using what would be moderately expensive external consultant rates) that it would require over 15 people working for one year to rack up $2 million in costs. 15 people! I know individual programmers that could build a website of that complexity in 6 months So how can we explain an estimated 15 programmers working for one year to build what would be classified as a no-brainer website?
There are only three ways Banco Popular can rack up such a high cost for a website:
- My initial reaction, before I read the announcement, was that Banco Popular paid a local consulting company this sum of money to complete the development. This would be an excellent example of the kleptocracy and panismo I mentioned in this blog post about the obstacles to web start-ups. Just as it shouldn't have taken a year for an internal development staff to build this website, it would probably take less for a consulting company. So, if, in fact, Banco Popular did pay a local company to develop the site, then (in a high falsetto) "somebody got an extremely nice commission, " to put it nicely.
- Banco Popular programmers really suck. Since I don't know any of them, I can't really say, but if it took them a year, then I think, and I repeat, they suck!
- Finally, maybe the team was much smaller, and maybe they weren't working on the project full time. Hey it could happen! So while they were not fulltime, perhaps the accounting for the project used their full-time rate, with benefits, and everything to determine the programmer's base rate; essentially over-inflating the hourly rate charged by an "employee". Yeah, I guess so, something like this:
Position Hours Rate Cost Project Manager 520 $1,000 $ 520,000 Anaylst 1040 $680 $ 707,200 Programmer 2080 $370 $ 769,600 $1,996,800
Now that's a team and company I want to work for!
I guess another potential explanation is that Banco Popular employees must be paid extremely well, but extremely well. While I'm sure a few select people are, typically they do not have technology jobs. Remember Puerto Rico ranks last in tech pay after all of the United States. So no, that can't be it.
Seriously folks, and we wonder why the Internet market in Puerto Rico is so abnormal, twisted, and outdated! When the leader in technology on the island comes out with something like this in 2008, all you can say is WTF? I would have believed this number back in 1997, but not today. When you have kids in their bedrooms building more complex web applications using Ruby on Rails than the best on the island, you've got to conclude that the Internet will be forever screwed in Puerto Rico.
Then again, as I have concluded, Puerto Rico is 10 years behind or more when it comes to the Internet, so maybe this is a good number. If you believe that, you probably also believe that the chupacabra is an alien, politicians care about you, or we actually are a bioisla.