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How Much Does Custom Software Cost?
In this article, we will tackle one of the first questions we get asked by our customers. How much does custom software cost to build?
It is a tough question to answer for anyone in the industry, even when you’ve been building software for decades. Why? Because there isn’t a universal answer when it comes to custom software development costs. It depends on specifics that can vary greatly from one project to the next.
What we can do is offer a general estimate for custom software development pricing. Then, we’ll look into six factors that often have a major influence on the cost of custom software.
Custom Software Pricing: The Short Answer
In our experience, many custom software projects have a price range between the $75,000 and $350,000 mark to design and develop the application and deliver it ready for use.
It’s a broad range, and probably not that useful if you are ready to put a number in your budget. That’s because there are so many types of software. A custom development project means anything from a calculator on your phone to a full enterprise billing system that supports millions of users. No two custom-built applications are the same.
To get a better idea of where you might fall on the spectrum, below are the factors that we find have the biggest impact on a project’s cost.
What’s the Cost to Build Custom Software? 6 Key Factors
1. Software Size
This one is straightforward. As the number of screens or pages increases, so does the amount of work required in the development process. The total cost of development will increase along with that additional work.
Small applications range from 10-25 screens, medium size are in the realm of 25-40 and large are anything more than 40.
What constitutes a screen? Generally, you would count anything that the user sees when they first come to your application. The total number also includes each unique screen behind every button click, link click or menu click.
For example, a screen to view customer information and a screen to edit customer information are two different screens. That’s true, even though they show the same information.
Generally speaking, small apps tend to run $75-100K, medium size apps are around $100-225K and large apps are $275K or more.
2. Software Complexity
Complicated logic means more time coding and testing. Will your application perform a lot of heavy analysis, scoring or number crunching? Does your company’s secret sauce have a lot of nuances and permutations?
Your application probably has some complexity to it that warrants special attention — and likely a higher cost.
3. Creative Design
Creative design is fun! This is where you get to select your fonts, color palettes, and images as well as have custom illustrations and animations made to give your application some sizzle.
It’s similar to when you decorate a house or buy a new wardrobe. There are nice options, extravagant options, and a range in between.
We typically recommend a budget of about $10,000 – $20,000 to cover coming up with the design and going through a few iterations of feedback and re-design. If you need more design time or have a lot of custom artwork that needs to be created, then the cost of the project will go up.
4. Integration With Other Systems
Integrating with external software introduces a lot of unknown variables into the equation. You just don’t know how well the other system lets information in or out, and what hoops you have to jump through to make these integrations reliable.
Sometimes, the integrations are effortless. In other cases, they are extremely difficult. Typical integrations like payment providers such as PayPal or Authorize.Net are extremely easy to integrate with. The same goes for credit check services from Equifax or Experian.
However, older and lesser-known systems may pose a challenge and increase the project cost.
5. Migration of Existing Data
Do you have data in an existing system that needs to go into your new application? Assuming it is more than you can feasibly type in by hand, then you will need migration. Migration is nothing more than custom scripts that take data out of your old system, dust it off and reshape it so it can fit into your new system.
The steps of the process are fairly straightforward. However, there are a lot of questions and decisions that need to be made as the two systems will store the data differently.
Most migration efforts are run a few times after the software is finished to make sure everything got translated correctly, and the new system is using the data as desired. The effort of figuring out the translation rules, writing the scripts, and performing a series of tests and adjustments, will add time and cost to the project.
6. Designing to Budget
Similar to building a house, software can be designed to fit a certain budget. You may want a butler’s pantry and a finished basement as part of a new home. However, if those luxuries don’t align with your available funds, then it makes sense to exclude them from the design first.
The same goes for building custom software. A good software development team can take your ideas, and create a design with a target budget in mind. Once the initial design and cost estimate are complete, certain features can be added or removed to hit your target number. It is definitely worthwhile to put a reasonable number to your target budget when you start a project.
But what is reasonable? Well, we all know that you can’t build much of a house for $10,000. Similarly, you can’t build much software for $10,000. If your budget falls somewhere between the $75,000 – $350,000 range, and matches the size figures shared above, with allowances given to the factors that typically increase cost, chances are it can be designed to your budget.