Building custom software is no small feat, and—let’s be honest—the software development cost can be intimidating. Don’t let your accounting worries get in the way of completing a high-quality software project with a reputable and experienced team.
Plenty of budget-conscious businesses have capitalized on tailored technology to take their business to new heights. All you need to do is consider how certain factors, such as technological feasibility, design components, complexity, and more, can raise and lower your development costs. By doing so, you can estimate how much you’ll spend per hour and on the project as a whole, and you can identify where you can cut costs.
Whether you’re designing internal use software or a software app to be marketed and sold, budgeting realistically is imperative for a successful software project.
Software Development Cost Factors
No software project is the same, and each one comes with its own factors that ultimately determine the costs incurred from software development. Let’s take a look at some of the biggest factors to consider when accounting for your next software development project.
Factors to consider when budgeting for software development
Size
Think of your software project as a shopping cart. A cart full of items will be more costly than a cart with one or two things in it. In software development, each item in your cart represents a screen. As you add more screens to your cart, the development costs incurred will increase.
So what is a screen? A screen is any page a user sees as they interact with your software app. It could be the home page, an open menu, a popup, etc. While some functions are often lumped together in our minds, they may require more work and money than anticipated because they require additional screens to display them to the user.
For example, a login page and a change password page are often thought of in conjunction with each other, but the reality is that they’re two different screens with completely different functions. Therefore, they will both come with their own individual price tag.
Complexity
Your screens will have various features. For example, a login page has text boxes, a submit button, and a link to reset your password. Each screen in your software development project has features that allow the user to perform a specific function, and these features define the complexity of the project.
The more complex your app is, the more careful you need to be when it comes to technological feasibility. Think of it this way: If you go to the grocery store to stock up for a party, you might notice that cashews cost a lot more than peanuts. Why the cost discrepancy? Harvesting cashews requires considerable more effort and risk.
Cashews naturally contain a toxin that can cause a reaction much like poison ivy on contact with skin. Therefore, the process of bringing those cashews from the fields to your local grocery store is more complex. Then you make the choice – do your party goers need cashews, or might they be just as satisfied with peanuts?
Similarly, a search page will cost more than a popup message because it takes more time, skills, and resources to create. Therefore, your total costs incurred will inevitably be higher for more complex functions. The more aware you are of the costs associated with each feature, the better you can make decisions about what to include in your app.
Design
Often when people hear the word design, they think of what is pleasing to look at. In reality, design holds much more weight. When budgeting for development costs, you’ll hear the term “UI/UX design.” This type of design focuses on making software easy and enjoyable to use at every stage while still maintaining technological feasibility.
There are many things to consider when discussing UI/UX design, from the colors used on a screen to the placement of buttons. The more complex your design becomes, the higher the total of software development costs incurred.
If your software development team can use a library, template, or leverage apps they’ve built in the past, you may be able to get a variety of design elements for a minimal incurred cost.
Supported Platforms
When budgeting for the cost of software development in the early stages, you’ll also need to consider how many platforms you want your new software to work on, depending on the type of software app and what it will be used for. For instance, if you’re going to create a mobile app, do you want it to work on Android, IOS, or both?
Ask yourself the following questions:
- How many or what platforms will your software need to be compatible with?
- Will it be internal use software or will you be selling and marketing it to other companies and/or users?
- Will you use software products on the desktop or will they be solely web-based?
Web development, desktop app development, and mobile application development all come with their own skill sets and challenges, so the answers to these questions will be reflected in your development costs and should be discussed with your team.
Development Team
As you would expect, the more people included in your team of developers, the greater the software development costs. On top of the new software app itself, you’ll be paying for the time and talent of each developer, project manager, and analyst on the team.
The developers will ensure your software achieves technological feasibility at every stage of the project and will help you make decisions that will make your software app a reality. When it comes to development teams, you have different options:
The size and type of your development team affect your overall costs
In-House
An in-house development team may be a more cost efficient option for your company, depending on the employees currently on your payroll and their skillset. If you already have the team members needed, you won’t see additional costs incurred to bring new employees on board. Plus, if you’re designing internal software, you can capitalize on an in-house team since they already know the inner workings of your business.
The down side to an in-house team is that hiring new employees for the job can be incredibly expensive and can drain time and resources for training. Most in-house teams also don’t typically have the skills and background knowledge necessary to create a high-quality software development project, since it’s not usually part of their typical job description.
Outsourcing
If an in-house team isn’t feasible for you, using outsourced companies is your best option. By outsourcing, you can bring on a dedicated software development team with the skills and knowledge needed to give you exactly what you want. For example, if you’re planning to create a web-based app, you can look at companies that specialize in web development.
While the software development costs may be a bit higher with an outsourced team, you may ultimately end up paying less in the long run. Rather than paying for the yearly salary and benefits of full-time employees, you can hire a development team for only as long as you need, paying only for what you want.
So, outsourcing may look more expensive up front, but it will most likely leave you with cost savings in the future and a higher-quality software app.
Ongoing Maintenance
Even once your software development project is declared finished, it isn’t actually done. That’s the thing about software—it’s never totally complete. Whether you want to add more features, streamline processes, or update based on user feedback, ongoing maintenance on your software is inevitable if you want it to remain useful to your evolving business.
It’s important to note, however, that the amount of ongoing maintenance can vary greatly depending on you and your team of developers. Communication is key, and transparency and partnership success will depend greatly on the team of developers and payment model you choose.
Payment Models
In software development, there are two main payment methods you will typically choose between: fixed price and time and materials. The payment method that’s best for you will depend on your goals for your software development project. Would you rather pay per hour as the time builds or would you rather pay a lump sum up front? What is your communication style? How involved would you like to be with the project? How strict are your deadlines? The answers to all of these questions can help you determine which model is best for your business.
Fixed Price vs Time and Materials
Fixed Price
Fixed price works as you would expect. You pay a lump sum of money up front for the software you want, including cost per hour for the developers’ time and the resources used to complete the project.
You give the team of developers the exact features and design you want, and they make it happen by the deadline you’ve agreed upon. And since there is little required involvement during the development process, this might be a good choice if you have fewer business resources to dedicate to supervision and close collaboration.
When it comes to budget, both teams agree on a maximum budget in a fixed price model. If you are following a firm accounting plan and have to stay within a strict budget, the fixed price model can make you feel safe and secure.
The biggest downfall of the fixed price model is the lack of flexibility. If you decide you want to add or remove features from your software at any project stage besides planning, it will be much more difficult. If your team is more flexible and allows you to request changes, it will take more resources since it requires discussion to reestablish the scope.
Time and Materials
The time and material model is completely different from the fixed price model. Rather than paying a single lump sum, you’ll pay a varying amount for the software development costs per hour spent on the project and for all of the materials used to complete it.
This type of model is especially useful when you can’t accurately estimate how much the app development costs or how much time it will take to complete. It also offers more flexibility for the developers, allowing them to take longer to create a higher-quality product.
The biggest downfall for this model is budgeting. With no contractual max budget set, it may be easier for your software development costs to continue rising, without you even realizing it, leading to an unhappy accounting team.
It also requires much more supervision and effort on the client’s part. If you have a strict budget and don’t have the resources or time to devote to a project, time and material may not be the best payment model for you.
Geneca’s Approach
At Geneca, we’ve capitalized on the best practices of both payment models. We understand that your budget is important, so we value communication in building a lasting partnership.
That’s why we help you determine a project scope that fits your budget before any work ever starts. We’ll help you decide what features are necessary and which ones you can forego to meet your business needs while still getting the software that will give you the best return on your investment.
Geneca believes in a partnership that helps you get software with the best ROI.
If you decide changes need to be made along the way, our developers are ready and willing to accommodate any within the realm of technological feasibility. We meet with our clients regularly and ensure that as you make any changes, we’re transparent as to how that affects your scope and overall app development costs.
Even if you have a modest technology budget, we want to ensure you’ve capitalized on it! If you’re ready to partner with an app development team that can make the most of your budget, get in touch with us today.