How much does Custom Software Cost?

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How much does Custom Software Cost? Great question! If you are considering investing in bespoke software, you are on the way to giving your organisation a competitive advantage. However, there are some factors you need to consider before committing your budget.

Working out the cost of bespoke software can feel like asking ‘How long is a piece of string?’ However, there are some key factors influencing price that it is important to understand, to ensure you invest your software development budget wisely.

1.     Size of the application – The more modules, screens, and interfaces in your application will determine the physical size of the code base that needs to be created, updated, and maintained. The more complexity, the more code, the more expensive as a rule.

 2.    Complexity – Complexity is usually determined by functionality. Does your application need to perform analysis based on complex algorithms?  How many interfaces are needed, both within the application and externally to third-party systems such as payment gateways, and billing applications? Is your application for internal users only or is it consumer-facing? The User experience (UX) and User interface (UI) can vary significantly and broadly speaking a consumer-facing application will be more complex in its UX/UI than a B2B application. Another factor that people often underestimate is whether that application needs to import significant amounts of data from an old legacy system.

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3 axis that affect price when looking at a Custom Application

 3.    Size of the User Base – Is this an internal application that will be kept within a company or is it an application that will be sold to other companies? The size of the user community will also impact the overall scope. A very large volume of users requires more complexity to manage within the application than a sophisticated but niche B2B application that is only going to be used by 50 people.

 4.    Your Resourcing Model

In addition to dimensioning the application, as a client, your choice of resourcing models can make a huge difference, not just to the cost of developing your software, but also maintaining it.

You can choose to source an internal team – where you have the full-time cost of recruiting, managing and training a full-time team. Not an easy option in today’s digital world where software development skills are in short supply.

Software Development outsourcing either onshore or offshore is becoming a much more popular option. You get more flexibility, and lower costs but need to think about how the communication and project will be managed.

And to add to the complexity, outsourcing companies can offer several different business models:

·      A Dedicated Team that is recruited to solely work on your account. You are part of the decision process and manage the staff that reside on your outsourcer’s payroll. Alternatively, you may opt for a time and materials contract which can work well if you are supplementing an internal team for short-term resourcing.

·      Some companies will also provide a Fixed Price Contract, although typically this is only where there is a clear set of business requirements against which the project can be priced.

·      Finally, a hybrid model which could be a combination of the above.

Whichever model you opt for, within a development team you will find several different roles. Not all of these will be full-time, but they are required in the overall project. These are the resources required to build the project once the requirements have been finalized, and the rough % of the time you can expect each to play on the project

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To provide a rough guide of how long it takes to build an application, the following table looks at different software development projects and the size of the application

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Typical Duration of projects

 Looking at industry averages, you can translate this into a price for a new application ranging from:

Custom Software Cost
Typical costs to build an application using industry averages

5.    Methodology

Finally, the methodology or approach you adopt for your custom software development project can make a huge difference, not only to the cost but also to the timescales for your project. SCAD Software has pioneered an approach to building software that significantly reduces the complexities of building bespoke software.

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Comparing the SCAD Software approach vs Traditional Software Coding

The SCAD Difference is that we can significantly reduce the time to build an application for clients. In our experience, we would expect to reduce the amount of time by up to 75%. The larger and more complex your application, the better the economics of using our framework.

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