Cost of Software Development? Here are 6 Factors to Consider.
The cost of software development comes up frequently in conversation. Hundreds, if not thousands of pieces of web applications are created each month. We’ve come a long way from specialized apps being the domain of large corporations with hefty budgets. Nearly any business can now benefit from a customized app. So, what’s holding many of them back? The cost of software development is a major concern. SMBs often lack the internal resources needed to build their apps and typically can’t afford to hire in-house engineers. Many consider outsourcing software development but still experience sticker shock upon receipt of the estimate.
Let’s take a look at what drives the cost of software development. We’ll also discuss ways you can build a workable app within your price range.
What Determines the Cost of Software Development?
Custom software can increase company-wide efficiency, increase innovation, and help you reach new customers. So, it would seem like a pretty good long-term investment. But it’s the short-term companies think about most. How much you’ll need to spend in the present often makes it difficult to see the lasting benefits.
Plus, because every project is unique, there’s no template to follow when pricing software development. A quick online search reveals hourly engineer costs of anywhere from $30 to $150 per hour and more. Estimated costs per application range from $20,000 to $150,000. Not very helpful, right?
What might be more helpful is to take a “backward approach.” That simply means taking a look at the factors involved first to see if maybe there are ways to keep your costs lower.
- Schedule
Time is a huge factor in estimating software costs. For instance, if you have a short deadline in mind, the development company will likely need to expand resources to accommodate your time constraints. Therefore, the more flexible you can be on delivery, the more you may save.
Another cost-saving idea is to ask your internal team or a software consultant how long it would realistically take to build your app. You can then multiply this time by the average cost of engineers and come up with a rough idea of your total development costs. Just remember there are always non-development activities that affect the final price.
2. Team Skills
Every project requires a business analyst, project manager, designers, developers, and testers. The size of a team depends on how complex the project is. What they’re paid is contingent on their experience level. If your project is complex, but you decide to hire as few people as possible to save money, you’ll likely end up paying more as the project will take much longer to complete.
3. Scope/Product Complexity
Project requirements are directly proportional to software costs, with every deliverable, constraint, and assumption adding to the bottom line. The more time you put into fleshing out your project’s scope, the more precise your cost estimation will be.
4. Creative Design
The Apple App Store alone has nearly 2 million available apps. If your product lacks visual appeal or is difficult to understand and navigate, there’s a good chance users will scroll past it. To make your product stand out, you need the support of professional UX/UI designers. The more customized your product is, the more you’ll spend to bring it to life. One alternative is to choose a standard design with pre-built templates.
5. Methodology
The methodology used is closely related to research and development expenses. A traditional waterfall approach can sound cost “safe” on paper as it methodically works its way from point A to point Z. But an agile methodology can be more cost-effective in the long run because it continuously adapts as requirements change during the development process.
6. Third-Party Integration
Third-party integrations like ERPs and CRMs offer multiple opportunities for businesses and users. Including them in your project can take additional time, which will affect development costs. On the other hand, these integrations can help you alter the software development cost breakdown so that instead of building unique features from scratch, you can integrate ready-made solutions into your software and cut the person-hours.
How to Manage the Cost of Software Development
There are so many variables that go into estimating the cost of software development, it’s nearly impossible to predict what investment your project will require. Some ways to manage costs and ensure coming in at or under budget include:
- Clearly defining your goals ahead of time.
- Using a continuous deployment solution like Agile that allows your app to be built, tested, and released much faster and more efficiently.
- Implementing a backlog refinement process so work can be adjusted to feedback in real-time.
At Zibtek, we’re committed to helping you build a custom piece of software that meets your business and budget requirements. To learn more about how we do it, reach out to us today.