Every business is different and the custom requirement of every business is also different.  No off-the-shelf software can fulfill the needs of any random company. The imperative growth of business, better-streamlined environment and the optimal utilization is the goal that is needed for perfect befitting software development.

Every business is dependent on any type of software. The digitized processes have overcome the old techniques of businesses and made great ease in the management of the data. The road is not that much smoother when the software is not adaptive. Hence, clever business holders always prefer custom software development solutions.

The software which is custom-built for every need suited to other relevant systems, and integrated into the existing software gives a smooth road and better scope for business. There are two major options available for any growing or large business: first, there are two major options available, the first is off-the-shelf solution and the second is custom software development. Off-the-shelf software is the ready-made software, which is developed in compliance with the general need of business. Now let’s understand a full story around custom software development services.

What is Custom Software Development?

Custom software development is meant to design, deploy and maintain the software for users. Organizations can define their requirements and communicate with the development team. Unlike off-the-shelf software, the custom software is commercially secured and cannot be sold as white label product.

In simple words, custom web development services are meant to develop tailor-made software applications according to the business needs of specific businesses.

When one is newbie and knows less about custom software development solutions, there is a long list of questions that can arise. Here in this article, we will discuss all viewpoints of custom software development solutions.

Components of Custom Software Development?

Custom software development is a process that needs a strategic plan and timeline execution.  For building custom software, you need to hire software developers or you may contact any agency providing such services.

Software Development Components

To know the cost of software development, it is required to understand the components of software development from scratch. Here are few simple steps-

  • Requirement Gathering

The primary step of software development is requirement gathering. The purpose of requirement gathering is to let the software integrate with other services.  It is really important to understand the existing needs of the business and know the flaws which you have in the current system. Make a list of changes you want in your existing system and discuss with the subject matter expert for understanding the workflow.

  • Know the Technical Requirements

After understanding the requirements of the business, it is required to understand the technical need of custom software development. You need to list out the technology stack, size of the team, project managers, and reliable companies for web design solutions.

  • Check the Development Pool

Once your plan is ready, it is time to start the actual developmental task. Gather up the right pool of talented resources such as hire expert web developer and internal IT team, hardware maintenance, and tech staff.

  • Plan for the Realistic Target

Building software is not a one-go task. Software development is divided into several iterations. Every iteration is built of several sprints, which are few achievable tasks. These sprints are built with realistic goals and every next sprint is some sort of update and feature enhancement to the project. The project development generally follows an agile method of development, but it depends upon the project manager to decide which software development methodologies he needs to follow.

With a realistic target, the project development might go slow, but the product becomes foolproof. It is always better to review the changes before deployment, because it may make an impact on the resources.

  • Iterative testing

An iterative approach is followed in testing by majority of top website development companies. The developed application is constantly tested for integration with the requirement.  There are two types of testing available, one is usability testing and the second is technical testing.

  • Documentation

While software development, you may face many issues and find many fixes for each. You can remember anyone or two fixes but not all during the development. Therefore, documentation is important to elaborate on every feature. Documentation can be a prototype of a development lifecycle.

Read Also: Discover The Cost to Develop A Mobile App

What affects the Software Development Cost?

While working over web development services, many factors raise and reduce the cost.  The development cost is majorly affected by the development hours and the geographical area of the development team.

Today, any application involves ML, AI, and IoT integration, along with many features. The multi-faceted application involves many features and customization opportunities, which demands some additional amount over your average budget app.

Software Development Cost Factors

Let’s discuss some significant features which can affect the development cost. 

1. Software Functionality

Software is not just an individual entity today. For complex businesses and growing needs, it requires to be integrated with various devices, and existing systems.  To accomplish the varied needs of business, it is obvious for an application to become heavily loaded with features. The feature-loaded app demands a few more bucks which increases the overall cost. Alongside, the web design solutions must be compatible to different devices, should have responsive design and recurring upgrades that are also relevant to the cost upraise.

2. Software Complexity

Often, the non-technical business owners expect some unordinary features which are usually time-taking or demand a high level of resources. For first-time project development, it is pretty acceptable to work with such a product at a one-time cost. The major complexity arises at the time of app maintenance. The more complex the app is, the higher the maintenance cost goes.

No app stays the same forever. An app needs some tweaks now and then, therefore it is always recommended to discuss the plan with your hired custom software development company. An expert app development solutions provider can help you understand how to delimit the product and keep your project at the minimal possible cost.

Keep it simple, keep it usable.

3. Choice of the Platform

This is a pretty common factor of development cost. When a project is developed, the primary step is to understand the targeted customer. If your prospective users are android users, you must opt for development over the android platform. Or if the majority of customers are using iPhone/iPad or any iOS-based device, the need is to hire expert iOS app developers.

Apart from this, the older technology may be cheaper somewhat, but it is not always a profitable business to go for. The project development must target to build a timeless app and seamless functionality over relevant devices. Lethargic custom software cannot achieve success; therefore it is important to keep your app updated with the latest technology and hire expert web developer for same technology.

Technologies used in software development: 

There are more than 700 PL (programming languages) available to use for custom software development services. Businesses investing in software development have a number of options for considering. Here are some commonly popular technologies: 

  • Preferred platform: Linux (more than 55 percent).
  • Docker the most popular imaging tool for deploying and running an app.
  • Python,. C#, Java, and PHP are viable languages.
  • Around 77 percent of developers use PHP. 
  • MySQL is the preferred database in 2020. 
  • React.js, Angular, and jQuery are most looked upon web frameworks.
  • Github is the most powerful versioning tool.
  • Python is known as the fastest language in 2020.

4. Integration with the Device and Existing System

Software needs to be integrated with several devices and the existing system. SAP or any other app is already used for the larger organization, where integration of the given custom software must be seamless. Integration with third-party apps is important for any product, which also affects the price.

When you hire software developers, describe them what you need exactly. For any ecommerce software, integration with the point of sale software is necessary. Software has some compatibility roles, which also affects the app price, developed from scratch by average website Development Company.

5. Complex Design

Every business demands cool, attractive, easy-to-use, and interactive next-generation apps. Custom software is built from scratch. Designing the theme and graphics which are time-taking as well and also increases the cost of hiring designers. Although, it is not always right to discard the design expectation. First, know your customers; if the design and interactivity are more important than the software functionality, then it’s all okay to spend over design. Otherwise, find a middle way between cost, functionality, and design.

6. Migration from Old Software

Not always, the software is installed on the fresh system. Sometimes, there are distributed systems or maybe leftovers of the previous system. Few companies often approach computer software migration to the newer one. A migration is meant to bring the software data from the computer to a new system and let the system propagate the data.

Alongside, there are many upgrade system demands, which also impact your software development cost breakdown over the long term. It is always imperative to prepare a proper plan for the timely maintenance of software.

7. Dedicated Team or Outsourcing

Hiring a skilled software team from top custom software Development Company is the most time-taking task.  For companies with large projects and the great demand for maintenance after software production, setting up the IT team is a convenient task. But if your project is not that huge, and it may not require regular maintenance, then it is a wise option to outsource the development task and reduce the average cost of software development.

In-house teams can be a skeptical option if the project does not go well.  Whereas outsourcing saves your cost of setting up the infrastructure, managing the team and other recurring expenses.

Payment Models

Average custom software application development takes from 4 weeks to 12 weeks. Large projects may keep running where the cost is decided on different criteria. Finding a collaborator for your software development also depends upon the project cost and the payment model. The most conventional model of payment for an average project is broken up into below parts:

  • 25 percent on UI/UX design
  • 50 Percent of Development
  • 25 percent on Testing and Deployment
Software Development Cost
Source: GoodFirms

The survey according to research over data says: 

  • Around 46.20% of website development companies offer basic projects under $20000. 
  • More than 60% of companies offer general utility software between $20000 and $40000. 
  • Around 38.50% of the website development companies build sophisticated software between $40000 and $60000.
  • Large software is built by 23.10% of IT firms for more than $60000. 

Above are too raw details of software development. Roughly we can part the payment model in below three models:

A) Fixed Cost

For fixed cost pricing models, the needs, scalability, and the deadline of the software are discussed prior. The documentation and requirements are proper and understandable.  Deciding on cost is easier and the expansion of the project is less probable in the near time. Here, the custom software development company gives the estimated rate upon scratch development.

B) Dedicated Team

The projects where the requirements are greater and continual maintenance is necessary, a dedicated team is required. Hiring a dedicated software team is also part of project outsourcing. Here the cost of the project is decided upon per seat. The general cost of a dedicated software developer per seat goes between $8 and $25.

For managing a large enterprise’s software service, it is general practice for hiring a dedicated team. Partnering with a software outsourcing agency gives the scalability to increase the business and scale down as per the market. 

C) Time-based Cost

This is an easy pricing model, where organizations pay for the hours spent on the product. This can be similar to the subscription-based model, where the user pays for the use.  The model makes it possible for the postpaid custom software development solutions. 

Cost Estimation Approach for Custom Software

Every project costs differently. Software companies offer different development services with different prices. For businesses willing to purchase custom software requires knowing how software companies decide the cost. It is better to resume the cost of development, for including and discarding the features.

Cost Estimation Approach

Let’s understand the cost estimation approach for custom software building:

  • Bottom-up Estimation

The bottom-up approach is meant to break down the concept into small components. These small components are a chunk of few other services. In software development, the project components are divided into several groups which are then separated into several sprints. The cost of these sprints is easier to decide, which are then summed up to calculate the cost of the website or software.

  • Top-down

Top-down is a very vague term invented by software solution architects in terms of software cost. Here the top management reads the scope and scale of the project. The previous similar projects give an easy estimation of the project cost. Here the organization requiring the custom app or software is told the maximum and minimum budget, whereupon the features are trimmed down or escalated. 

  • Analogous

The analogous pattern is suitable for large projects. Custom software development solutions are segmented into several parts. For large projects, the minimum viable product is first launched.  With the completed tasks, it becomes an easy task to estimate what could be the cost of later project components.

This information is vividly used by the developers for estimating the cost of other similar projects. The cost estimation method relies on historical data and previous projects. This costing model has its limitations. Two projects cannot be the same, and rough cost estimates upon previous data can stand nearby but not suffice. 

  • Parametric

Parametric is a more practical approach to custom software development cost estimation. Here the previous data and the cost factor modeling are used for determining the per-unit cost. The cost of a particular component is an easier way to reach the project cost, keeping in mind the margin of error. The parametric approach is famous for estimating the cost of construction projects, but now also has taken place in the software industry. 

  • Three-point Estimation

Three-point estimation comprises three separate estimates by custom software Development Company. This approach is less common in IT, but still relevant to talk about.

  1. First point: The optimistic behavior where the work is finished and funds are used most efficiently.
  2. Second point: The pessimistic behavior, where the work is finished but the funds are badly managed.
  3. Third point: A mid-way solution, where the most likely scenario is estimated.

This above-mentioned three-point technique is used to have the average of these three costs.

Read Also: Discover The Cost To Develop A Website

Tips to Reduce Custom Software Development Cost

In this, we will provide you with some tips that are beneficial to alleviate the overall cost of custom software development. Right from project planning to its deployment, you can take help from the below points to reduce the exact cost-

1) Choosing the Right Software

Not always it is right to opt for developing the software from scratch. There are many utility software available that offer almost all possibilities to accomplish any task.  For example, Microsoft Office is a complete software package. The package offers almost all essential services, which are otherwise either not possible or may take a long time to prepare for. In such a way, it is advisable to purchase ready-made software. But if the requirements are unique, inventory management, sales analytics, etc., and then you must go for custom software development.

For several exclusive requirements, it is quite challenging to match the needs.  Choosing the boxed products may cause integration, migration, training, and up gradation issues.

2) Hire Software Developers or Outsource

Cost is greatly differenced by the choice of developer engagement model. There are prominently two ways.

In-house development comes with its own maintenance cost such as insurance, perks, allowances, productive environment, etc. Even for large companies, hiring a team of web designers, programmers and testers is not that profitable. If you want to change the technology, you need to change the entire team structure or have to train them. It causes the additional cost over software team management.

Hiring a dedicated team does not come with such a cost. You need not worry about finding talented resources and you get the expert team.  Collaborating with an expert development team leverages the perfect software.

3) MVP is Good to Build

Software is all about some useful features. If you are building software for selling, it is essential to understand the cost and then decide on ROI. For a project, you have to hire expert web designers, a project manager, a programmer, and others. And, if you find that project failing, it is something worst you can expect. For maximizing ROI, you need to put some analytical ideas upfront.

You can develop a minimum viable product with some attractive features, which can woo the consumers. You can set the advancement for the next releases from your list of high and low-priority features. This way you can check the market behavior for your product. And scale down the sudden cost.  MVP is low cost and cost estimation for several launches is more realistic.

4) Go through Ladder

Always launch your product on time and move through the ladder. Exploding the market with something astonishing is indigestible. Numerous money minters in the market can easily copy your idea and defeat you. Go slow and tactfully. Launch products in several grades after reading customer mind.  Read the contingency properly and invest accordingly.  This way it makes it easy to estimate the cost in several phases.

A ballpark of Custom Software Cost

A project cost cannot be determined exactly without knowing the scope. Here is an estimate to advance your research up a level.

1. Low range software

Applications handling simple tasks are widely built. Such apps are built over databases and operate over simple calculations. These apps may cost between $10000 and $25000.

2. Medium range software

It covers the application with few catchy features such as issuing reports, tracking performance, and notifying client browser activity.  These apps cost between $100000 and $250000.

3. High range software

Here comes the enterprise-level software, which may be either a SaaS solution or any large complex web development project. These may cost higher than $250000.

A custom application cost cannot be estimated without actually analyzing the requirement specification and scope of the project. But roughly we can range any product with prior experience.  Taking anticipation from the prevalent products, cost to develop a custom software will be around $10,000 to $100,000.

It is a long bridge, which is not practical to put forth for cost decisions of any software development services. Software can be anything from simple calculator enterprise-level software, from purchasable option subscription-based software.


It is quite frustrating to understand the high variation in software cost. You may get cheap and costly resources depending upon the area you hire a software developer or the time to market you put up front. The best recommendation is to find an IT collaborating partner, who can meet your exclusive business needs. Discuss the full project scope and then think of trimming or escalating depending upon the budget.

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