How much will my custom software application cost?

by Roman on August 26, 2019

How Much Will My Custom Software Application Cost?

Your business has grown rapidly, and there’s no end in sight. You’re ready to create a more sophisticated set of processes to support scale, or maybe you’re looking to offer the market a new, unique, software-based service to go along with your existing offerings. Either way, first thing’s first: congratulations! Business is booming, and you should take a moment to celebrate that.

But after the celebration, I’ll bet I can guess the first question you have about your new software ventures: how much will the application cost?

This is what most of our clients want to know first, and we understand. What kind of investment are you making, what factors impact the costs, and is there any way to save a little money without risking quality?

Unfortunately, there’s no easy answer. But I can share some trends, general knowledge, and best practices here to get you started.

Let’s begin with the bottom line:

How Much Will my App Cost?

I hate to say it, but it depends.

Custom software development prices vary from $15,000 to millions of dollars. Quite a gap, right? That’s because no two custom software applications are identical, despite the fact that they are made up of the same materials and modules.

Let’s set aside software for a moment and look at another industry for comparison. Imagine that you want to build a house. You’ll start with the same question: how much will it cost?

But you know that the cost of your custom house depends your answers to a long list of other questions:

  • What kind of house do you want to build?
  • How many stories?
  • How many bedrooms?
  • What kind of land are you building on?
  • What materials will you use?
  • What features do you want the house to have?
  • What kind of aesthetic are you going for? Stunning and dramatic, or simple and functional?

The cost of your house will vary dramatically based on these factors and more, and it’s impossible to determine the exact cost without a completed plan and clearly defined requirements in place.

The same is true for software, though we understand that it’s harder to relate to custom software than to a more tangible, familiar process like building a house.

But while we can’t tell you exactly what your custom software application will cost without looking at a “blueprint,” we can start to look at some of the characteristics that will impact that cost.

What are the biggest Impacts on Costs of my software?

In a recent blog post, our VP of operations, Eugene Fesko, wrote in depth about some of these characteristics, but I’ll provide a brief refresher here.

1. Software Size

Just like comparing a tiny cottage to a mansion, the relationship between size and cost is quite simple. If you’re building an internal database for three employees to access, then the cost will differ significantly from a situation in which you need your software to be the “eighth wonder of the world” — an architectural monument designed to serve thousands of users and even more varied work scenarios.

2. Software Complexity

When we press a key or click a mouse, the thing we want to happen simply happens, like magic. The complex chain of events behind that action is hidden from us, and that’s exactly as it should be. But the outward simplicity hides the truth behind software development: there’s much more to it than just the click of a button.

Take a simple example. When you input your numbers and push this “Calculate” button on a website, you get your answer instantly, no matter how complex the calculations that have to happen in the background.

But exactly what that button has to calculate will be a significant driver of the cost to create that button. Simple addition will be much cheaper than complex algorithms and equations.

3. Creative Design

Similar again to the house, the overall aesthetic will affect the total cost of your software application. There are plenty of free templates for web pages, buttons, and more that many businesses opt to use, especially for internal applications that only employees will use.

But if your goal is to design a completely unique application, be prepared to pay for several hundred hours of team work to define and coordinate design requirements, draw all the elements, coordinate design with function, and deploy. Again, nearly every facet of the cost depends on your goals and objectives for your application.

4. Integrations with Third-Party Systems

Will your application stand alone, or does it need to integrate with other software — PayPal or SalesForce or another custom application your business uses? Some integrations, like PayPal, are relatively easy to achieve, while others, such as integrations with legacy software or social networks, are more difficult, time consuming, and costly.

Additionally, any integration with existing systems adds uncertainty to the project, increasing the risk of unforeseen obstacles, delays, and costs. The more integrated you want your application to be, the more you can expect to spend.

5. Migration of Existing Data

If you have data to move from your old system to the new one, and it’s too much to transfer by hand, you’ll need to add additional budget for data migration. These custom scripts take data from your old system, dust it off and reconfigure it, and then integrate it into your new system.

The steps of the process are fairly straightforward, but they are time consuming, and they require a significant amount of planning upfront to account for the different ways each system handles data.

All of these factors — and so many more — impact the cost of software and account for that significant range in costs.

Can’t You at Least Give Be a Ballpark?

Keep in mind that the total cost can’t be determined until a project is fully scoped. That said, here are some smaller ranges you can use as broad estimates to ground your research.

Low range: $15,000 - $25,000

This low range covers the bare minimum in terms of features and functionality. Consider it a possibility for skeletal applications that manage just a single, simple task. Maybe an internal database that runs a few straightforward calculations.

Medium range: $25,000 - $100,000

This medium range may cover an application with a few cool features, such as generating simple reports, issuing templated bills, and tracking client activity.

Average range: $100,000 - $250,000

If we’re being realistic, chances are that your application will fall into this price range, where you start to get more sophisticated features, user interfaces, reporting capabilities, and more.

High range: $250,000 and up

At this range, you’re looking at full enterprise software applications or new, comprehensive SaaS platforms. At the lower end of the range (closer to $250,000), you can expect to see a good feature set and strong reporting, but still nothing too cutting edge in terms of functionality or experience.

I know it’s frustrating to see so much variation in pricing. You may get more or less for your money depending on who you work with, but our best recommendation is to find a vendor that can meet your needs — and that you feel confident and excited to work with — and fully scope out the project to determine how much it’s going to cost. From there, you can work backward and adjust the scope to save money if need be. There will likely be opportunities to cut costs by streamlining functionalities or making other adjustments. But you guessed it — it all depends!

Roman Kukhta

Account Executive

Tags
Software Development
Outsourcing
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