Custom Software Development Pricing Guide & Examples for 2022

Bespoke, or custom software can cement your business as a unique player in a competitive market. It can streamline your internal processes, boost the value of your products, and even become a marketable product in itself.

There are numerous cost-saving and value-addition benefits to custom software, but with the initial expense being so high, it’s important to establish whether your utilization of it will provide a return on the cost.

Custom software development price is determined by the complexity of the software, the level of expertise, and the scale that you’re looking for. In most cases, smaller is cheaper; but cheaper isn’t always better in the long run.

So how can custom software help you? And how much will it cost? We’ve got a few examples and a whole list of drivers for the current prices of custom software for you below. First though, some context.

Custom Software

When choosing software for your company, it is commonly understood that there is a huge range of off-the-shelf (OTS) software available that covers a wide spectrum of needs and is relatively affordable. For some applications, however, custom software may be a better fit.

Custom software is built around the needs of a company and functions as an integrated business process. In this way, as the company scales, the software keeps up and supports the expansion of both itself as a service and the company as a whole.

Essentially, custom software fills the gaps that OTS software can’t. If your company has a unique approach to an issue, the nature of OTS software as a one-size-fits-all solution means it’s unlikely to be a perfect fit for your needs.

This is where you’ll be considering custom software, and with the right package, it will hopefully facilitate this uniqueness and emphasize it in your company’s progress into the market. However, thinking of a bespoke build as the solution to all of your problems isn’t a healthy approach, and it’s important to consider the operating and maintenance resources, and ultimately the ROI of taking on such a project.

The benefits of custom software are numerous, but its development is complicated and expensive, and as such, this strategy isn’t suitable for everyone.

This software has a range of applications in which it creates value, but it comes with inherent challenges that affect the cost of the service. Before we cover the costs, we’re going to go over both what it’s good for, and what the inherent challenges to a custom software project are.

Custom Software Applications

The unique nature of a software solution that’s built in-house and designed to fit your needs specifically means that it can come in many forms. Typically, you’ll find custom software used in the following applications:

• Streaming Platforms – Large, competitive industries like this have an absolute necessity to stand out. Where smaller websites might function fine with embedded YouTube videos or make use of the countless third-party video hosting and UI options available, media giants like Netflix and HBO wouldn’t be able to compete without their own brand.

This means designing a player, a streaming system, and user analytics from scratch, to fit their specific needs and the create something that differentiates them from each other

• Self-Check-Outs – These are more common now than ever before, and each one needs to be bespoke to the company hosting it. Supermarkets and fast food joints are streamlining the customer experience by providing easy access to menus, ordering functionality, and payment to their target market and again, this means designing software that matches their brand identity and provides a memorable service; something that would be impossible with OTS software.

• Maps and Navigation – Google Maps is fine for general-purpose navigation for many people, but for a company dealing with complex delivery systems or whose bottom line depends on getting customers to a location as effectively as possible, there needs to be a well-designed custom software that will accomplish these tasks for the company and be naturally scalable across the range of applications required.

Again, analytics comes into play here, and the specifics of these analytics will depend on the unique needs of the service provider.

But there are numerous smaller applications for this type of unique software, including searchable registries, cloud infrastructure, and platforms for product development for small businesses.

So, this kind of software development requires an understanding of company needs and trajectory, a deep knowledge of how to add value to the customer, and of course, plenty of expertise in software development.

Once it’s completed, this software adds value, facilitates growth by combining workflow into a specialized system, and can even become a marketable product for other companies with similar needs. It’s also more resilient and often easier to use and train employees to work with. So, why doesn’t every company employ this strategy?

Well, usually it comes down to cost. The strengths of the software itself come from the same place as the challenges in developing it, and each of these contributes to the price of the finished product. Here are some of the largest roadblocks to the development process, and a bit about how each one affects the cost.

Custom Software Development Cost and Challenges

With software, it’s usually the challenges that determine the price. There are multiple challenges with any build, but with custom work, these become very rigid parameters within which to work. As such, expertise is even more critical and the challenges are even more tied to the cost of development. Here are eight reasons why your custom build might cost a lot.

Expertise

The first and major issue with this is finding the expertise. Most companies simply won’t get a return on the value of custom software due to this. The specific nature of the software necessitates a high level of experience in the dev team, and this isn’t something that founders or even established SaaS companies are qualified for.

Companies who cut corners and try to do it themselves are liable to incur deeper and more painful costs down the line when it comes to maintenance, security, and scalability.

For a small team of two, a medium-complexity build that’s outsourced natively will likely cost at least six figures for a year of necessary expertise alone. To put it into perspective, a very large enterprise may need hundreds or even thousands of people on its team.

Sourcing

Relating to the above, there are different ways to find the workforce you need. Ideally, you’ll use a combination of all of them for the most optimal approach based on your budget but it’s worth keeping in mind the differences in cost for each.

Your in-house people are obviously going to be the cheapest if they’re already in the company since they can be assigned to tasks as the workflow allows. They’re also likely to be the least experienced, especially if you’re in a startup.

If you’re looking to hire, this may solve the problem of experience but cost you additional benefits and taxes and so suddenly becomes expensive. For a small job, hiring is probably the least efficient approach.

Freelancers are relatively cheap and great for short-term projects. Issues arise with reliability and communication, as they don’t know your company and may not be working on your project alone.

Outsourcing strikes a good balance; it covers both short and long-term goals, provides reliable support, and should cover your expertise issues. It’s not cheap but will be more reliable and easier to manage as a whole.

Size and Platform

This makes it obvious that the scale of the work determines the cost. A very short job on a simple piece of kits such as a mobile app or game can be quickly managed from start to finish and the expertise is readily available. This might mean a job of, say two to three months, and is likely to set you back $30-50k.

Cross-platform apps are also going to require higher costs, and a separate codebase for each is even more expensive. Whether you’ll need either will of course depend on your product, but when calculating the ROI, be sure to factor in these costs individually against each platform.

Complexity

Complexity is often related to size, though it’s not exactly the same, and the price of the service won’t scale linearly. More complex software calls for more experienced developers and usually longer build times. So, you’re paying a premium for the expert and paying more for more hours.

For a CRM platform, for example, you might pay an average of $100k for a basic set of tailored features. For a large solution like some of the popular big players, you’re looking at upwards of $600k. E-commerce might start a little lower but will have a similarly high end, as the complexity goes up.

Design

This could be considered a subcategory of complexity, but rather than functionality, design refers to the interactive nature of the software and its aesthetics. There are specialists needed for this, too, and it can drive up the price.

Of course, this challenge will depend on your needs, but a smooth UI isn’t just for customers; you’re going to have a native team of employees using it too, and it helps if they don’t need to be programmers to know how to use it. If it’s B2B software, the UI could add another couple of thousand to your final cost.

Some companies hire a separate team for the UI to get specialists involved, and this brings with it issues of integration with unfamiliar software.

Integration

Again, another subcategory of complexity, third-party integration is going to take a lot more work. Many OTS software is already expensive for this reason, so a custom build with these features will be costly. Again, you’re paying for expertise here, as there are significant security issues at stake.

A really simple example here would be a social media sign-up feature. This might take 20h of expertise, so expect to be charged for that! You can purchase APIs if they’re available, and this might be cheaper than building your own, but either way, it’s a cost to factor in.

Testing

This is obviously a necessary step and one that might not be possible with your home team, at least at first. If you’ve got your engineers, IT, developers, and other stakeholders in the custom software development involved in the build, you should be able to save money on testing and maintenance down the line – and it’s important to have qualified people who know the software in the house – but before rolling out, the dev team will probably be the ones to test your software.

Cutting corners on the testing stages to save money would be a mistake after dropping so much on the development. The more you save in the short term, the more it’s likely to cost you in the long term.

Ownership

This could be a blind-sider. When budgeting for the development of custom software, don’t be caught out by the costs of ownership. Operating, modifying, and retiring your custom software development cost different amounts, and are generally higher with the lack of time spent developing.

If you’re looking to commission your own customer software, go back over all the previous costs and think of them in the context of long-term savings in these areas. Scalability and performance are important to invest in, and it’s worth repeating that cutting corners in the development might cost you more down the line.

Of course, the whole process is going to cost more depending on the factors listed above and how thorough, specific, and robust you need the testing to be, and that’s not something anyone other than you can know. However, we’re going to go over some famous examples so you can get a feel for how much they cost.

Custom Software Development Pricing

The following is a short list of common custom software examples and the prices for each. Keep in mind that what you might have been able to afford in 2018 will likely cost a significant amount more in 2022.

• Voice Recognition

This is a good example of software that not many could afford. Investors put more than $24 million into the development of Siri, which Apple subsequently bought (possibly for eight times that).

• Digital Menus

There are even more expensive examples. In 2018, McDonald’s forked out $6 billion on their investment in digital menu boards, a move that signified a rapid change in consumer preference for digital menu and payment options.

• SaaS – Simple

As an example, let’s say you’ve outsourced the build to Eastern Europe to make a simple MVP addition to your product. If you outsource this, you may find it costs less than $15k, depending on the complexity of your service and how often you need to redesign your functionality.

This price is also based on outsourcing to Eastern Europe, where the costs are less. The ROI on this might be easy or hard to estimate.

• SaaS – Mid-range

A searchable database with filters might land you with a total cost of at least $35k, and this is a great example of something that’s specifically designed to save time – bringing with it an easily quantifiable ROI.

• SaaS – Complex

However, if you’re looking for an entire system for a niche business, you’re obviously going to have to budget a lot higher. The lowest you can expect to pay for an internal system, based on around three years of production from start to finish is $85k.

Calculating ROI on such a large project is both more important and harder to do than on smaller examples.

To get an idea of the custom software development pricing for your specific case, it’s necessary to identify exactly what you’ll be needing and what your return on the cost will be. For help with this, contact CodeFutures, who can give you expert advice and provide you with a team to help you through the entire process.

Conclusion

Custom software has innumerable benefits for a company. But the one that really counts in business – ROI – depends on the specific way your service is unique, or whether at all it really needs to be.

From streamlining internal processes to improving your cloud infrastructure to creating a more engaging end-user experience, there are many ways in which a custom build can enhance your business. Figuring out how to afford it, and whether the value it adds will create a return, in the long run, is the hard part. Still, with expertise in the field growing by the day, it’s never been easier to find qualified help with software development.

CodeFutures offers a range of expert leads that can help you turn your ideas into a unique business presence, modernize your legacy apps or automate your processes to help you improve your product, as well as help you get an estimate for your custom software development price.