Estimating the Cost of Custom Software
After learning about custom software applications, one of the first questions clients ask is, “how much is that going to cost?”
On average, in our experience, most custom software applications cost between $50,000 to $250,000.
By the very nature of being “custom,” as you’d imagine, it’s tough to throw a square number out there — some small-scale integrations may be less expensive. Likewise, an enterprise-scale application with many intricate functions and features could cost much more than that.
We understand that for the majority of the organizations out there, price matters. The easiest way to explain pricing for a custom software application is to compare it to buying a house. While there’s an average range, there are also budget fixer-uppers and multimillion-dollar mansions.
Going into the process, you probably have a general idea of a budget and a laundry list of things you want. You’ve likely already examined what’s available off-the-shelf and decided that to get what you want out of your investment, you will have to build your own solution. Like building a house, the price varies drastically with the size of the application and its complexity — even the finishing touches can make a huge difference. For example, comparing a basic user interface to a full-scale graphically enhanced application is like comparing sheet vinyl to marble tile.
Keep in mind that with a smart budget, our team can design and engineer a solution that meets your business’s needs. To help you better understand how much custom software applications cost, we’ve put together a list of nine factors that affect the price of software development.
Breaking Down the Cost of Custom Software Applications
When building a custom software application, the cost really comes down to time — the amount of development work required and the complexity of the application. Here, we’ll illustrate the individual factors that affect the cost of a custom software application.
1. The “Big Things”
Our rule of thumb is that for each “big thing” you need the application to do, expect to add at least $10,000 to the total cost of the software application.
What do we mean by “big things”? These are the main functions and features of the software — for example, client management, scheduling, inventory management, and/or reporting. “Big things” are what you need the software to do for your organization.
The more “big things” you need the software application to do, the more expensive it gets.
2. Size
A lot of the time, when people think about size and software, they think of megabytes, gigabytes, and terabytes. Here, that’s not exactly the case.
By size, there are a few things you need to consider:
- Screens. The number of screens within the application, since each screen will need to be coded.
- Users. The number of users the application will need to support, as well as different user types and permissions.
- Organization. Is the application supporting a handful of users or an entire enterprise?
- Type. Are you building a minimum viable product (MVP) solution for early adopters or a highly polished application?
3. Complexity
Consider all the different things the software will be designed to do — how complex are the functions and logic the application will need to compute? Are there a lot of complex formulas and number crunching? Are you processing a lot of data? How do the application’s features relate to one another?
With complexity, not only does the application’s development time get more expensive, but the amount of time it takes to complete the application’s testing process increases as well.
4. Design
How pretty and polished is the application? Sometimes, it may just be a simple integration or a piece of middleware with few UI elements. Some companies don’t have many users for the product and only need an MVP solution to start.
Expect the application’s cost to increase as you add design elements like dashboards, custom graphics, and videos. These design elements take more time and expertise to create.
5. Integrations
Which existing applications will your new custom application communicate with? Some existing applications make integrations and data sharing easy. On the other hand, older software applications, especially if they’re custom, may require additional development work to build and test integrations. Each integration would count as a “big thing” in calculating the overall cost of the application.
6. Data Migration
Data is at the center of your application, and if you’re an existing organization, you probably have a lot of it. Where’s your information currently stored? Will you need a custom script to move data from one application to another? Is the data being migrated “normalized”? In other words, how good is the data integrity — for example, are dates forced into one format? Data that has not been forced into a normal, internally consistent state can add significant complexity to a project.
Like integrations, testing focused specifically on data, including storage and backups, requires development time and expertise and should be considered in the cost of building a software application.
7. Security
Unfortunately, many organizations and software application developers forego security to build applications quicker with fewer development and testing hours. Security is definitely not a place where you want to cut corners, especially when your customers’ data is at stake.
When getting quotes for a custom software application, be sure to ask about security. The organization that’s building the application should be able to answer questions you have about frameworks, cybersecurity, and data retention.
8. Maintenance and Support
What’s your organization’s technical expertise? Do you have developers on staff, or will you depend on the support from the company that developed your application?
Similarly, is this a one-time development project, or will you have future enhancements and development projects for the application? An experienced software development company should have the staff to continue to support your application if needed. In contrast, a smaller-scale operation may not be capable or interested in supporting the software after it’s handed off to you.
9. Expertise
Like building a house, software application development takes a team of experts to create the final product — for example, where a house is built by carpenters, plumbers, and electricians, a software application takes a team of developers, QA testers, and UX designers.
Also, like a house, experienced, high-quality builders tend to cost more than inexperienced builders. The results usually speak for themselves.
How Does the Cost of a Custom Software Application Compare to Off-the-Shelf Software?
Off-the-Shelf software is any application that’s ready-to-go, straight from the manufacturer, without being customized for your business. Typically, these applications have fixed pricing and feature sets.
Like buying a house, when do you determine to build a new one or buy one that’s already out there?
The case is similar for custom software applications. The off-the-shelf software may not do everything you need it to. Similarly, it may break the bank by having more features than your organization would actually use. It could come down to having the wrong color icons or personal preference—with custom software, you get exactly what you need to meet your organization’s needs. With off-the-shelf software, you’re opting for a solution that meets most of the requirements for many organizations.
We Meet Your Needs.
There are many factors to consider when estimating the cost of a custom software application — with your budget in mind, we can build, deliver, and support a custom software application that meets your business’s needs. We’re here to help make things easier, including calculating the cost of custom software for your organization.
Contact us to learn more about custom software applications.