What does the development of custom software cost?

by Meike Müller

The question of costs is usually asked at the beginning when planning a custom software, but this cannot be answered right at the start. Many factors play a role in the calculation. Only if these were determined by you and your team, the height of the expenditures can be estimated approximately. Which factors you should determine beforehand and how the costs of an individual software can be calculated, we want to break down in this article.

Reading time 3 min

What you can expect in this article
  1. What are the cost factors in custom software development?
    1. Complexity or difficulty of the entire project
    2. Scope and number of functions required
    3. Creative and meaningful UI/UX design
    4. Creation of the designSoftware integrations from third parties and possible licensing costs
    5. Migration of various data
    6. Rights of use
    7. Time required for the project
    8. Costs of additional project participants
    9. Additional training
    10. Maintenance costs
  2. How to calculate the expenses?
    1. Our tips for low expenses
  3. Your development service provider
  4. FAQ
    1. How long does it usually take to develop custom software and what are the main factors that affect the development time?
    2. What is custom software and how does it differ from standard software?
    3. How is the maintenance and support of the developed custom software performed?

What are the cost factors of software development?

The cost range of an individual software can be very large, since it depends on different factors with the computation of the costs. After all, it is also a very individual software solution, which accordingly has an individual price. Thus, it is not possible to determine directly before the start of a respective project how high the expenses will be in the end. For a better estimate, you should consult your software development service provider in detail and plan the individual items that the software project should contain. This will facilitate the pricing as well as the subsequent programming. The following factors play a role in the calculation of the price:



The difficulty of the software development project

We start with the first point that is crucial to the final cost point: the complexity of the project. What challenges will the programming staff face? Will new, perhaps unfamiliar technologies or programs have to be used? Is there a need to use complex security systems and safeguards? All of these aspects can affect the project's expenditures. In particular, projects that require a high level of security effort also take more time.

It's also best if you build in margin for unexpected problems and developments of the project. Because during programming, it is always possible that new ideas for improvement will emerge, the competition will set a new trend, or a problem will arise that could not have been considered before.

Number of functions of the individual software

A crucial point for the cost determination is the number of functions, which the individual software is to have later once. More functions mean at the same time higher expenditures for the entire project. It makes sense therefore to define the functions at the beginning. The more complex the individual function, the higher the expenses for a single function, because extensive functions require particularly much time in the production and a more difficult design.

UI/UX design and creativity

The intuitive use of the finished custom software is of great importance. After all, your employees or your customers should be able to find their way around and use the application right away. The goal is a positive user experience and this can be ensured by a thoughtful design. So, you definitely need to keep in mind for calculating the expenses of a custom app that you also need to pay a UI/ UX designer. Depending on which technologies are used, for example motion design or Adobe, this can add to the financial weight.

You then plan with the UI/UX designer how fonts and colors should look, for example. Any extra request will cost more, of course.

Design creation

Design creation directly concerns two points. On the one hand, it is also, design-technical aspects, which we have already described under the last point "UI-/UX-Design and the creativity". On the other hand, it also refers to the design of the code, i.e. the software architecture. The code must be structured and documented in a meaningful way so that changes can be made afterwards. If the design of the code is to be structured and tidy, the effort for the software developers is naturally also greater. This in turn is then reflected in the expenses.

Third-party software integrations and licensing costs

Depending on what kind of application is being developed for you, it may be that additional third-party integrations need to be built in. This usually costs something as well, but is usually cheaper than a completely new development. This happens, for example, when files have to be exchanged between systems, payment options have to be integrated and so on. The costs for licenses should also be taken into account when planning the budget for the development.

Data migration

One factor that is often forgotten is the migration of existing data. For example, if you already use an application or system in your company that contains important data, it must somehow be saved and transferred to the new custom software. If the volume of data is particularly high, it is of course not worth transferring it manually. So for the transfer you also need custom scripts that automate the whole process.

Time is also required to properly utilize this data in the new software. How should the data be stored, has all the data been transferred correctly, and where should it be used and played out? These questions must also be answered by the software developers and are therefore also reflected in the costs.

Rights of use of the individual software

So that you can individually use the application developed by the programmers of a software agency, additional expenses for the so-called rights of use may be incurred. The rights of use can be assigned by the author of a code to you or several users in terms of time and quantity. If it is an individual software, you can also ensure that only you receive the rights of use. Depending on the software agency, there are additional expenses.

Time scope of the software development

Once all tasks and functions of the future software have been discussed, your software development service provider will give you an estimate of how long the project will take in man-days. Normally, software agencies charge by the hour. In this way, you will know how long the project will take and what expenses you will probably incur. Of course, you will only get this information when you are already deep into the project and not for your planning.

Resources of the project participants

Another cost point is that not only the software developers and designers of a software agency are involved, but also additional contact persons from your company. These must be included in your cost planning for queries, updates and so on. How high the expenses are for the individual project participants depends, of course, on their position and experience level.

Software training

Once the programming is finished and the new system is complete, it may also be necessary to train all employees. This is so that they can use the software properly and are informed about all the functions. Maybe you can do the training yourself and then only indirectly bear the costs of the employees who spend their time in training. But sometimes it makes sense that the external programmers, who were involved in the software development, take over the training. The expenses for the final training are also included in the software offer.

Maintenance costs

After the software has been completed by the service provider software development, there may be times when updates need to be run. Servers or third party applications need to be updated and brought up to date every now and then. This service is offered by many software agencies and is booked under the item maintenance and monitoring.

How can the costs be calculated?

As mentioned above, the costs of development are charged by the hour. So you first have to sit down with the programmers of your software agency and determine all the important functions, so that the programmers can give a realistic time estimate. Then all you really need to do is multiply the number of hours by the hourly rate.

Furthermore, you add the costs of all other project participants, the expenses for licenses and other software integrations, for the design and so on. At the end you get a pretty realistic sum of your total costs. But keep in mind the point we already touched on above: Not everything always goes according to plan, unexpected tasks come up for the development team and this results in additional expenses.

Our tips to keep software costs as low as possible

Depending on the scope of the software, it may be that there are relatively high expenses for the development. In any case, it will be worth it, because you will optimize, simplify, and automate work processes, which will probably save you a lot of time. In addition, the individual application is tailored exactly to the needs of your company and therefore maximally efficient. However, if your budget is still limited, you can also start with a simple software, for example. What are the most important features you want your software to cover and which features are just nice extras? Focus on the features you can't do without.

Another point that can save time and thus costs is to let the developers decide on the technical details. These are, for example, the system environment and software components. That's where the programmers know best and can make a choice that suits them best and that they can work with the fastest.

Your software development service provider

As a rule, companies choose external developers for self-contained software projects. Often it is not worthwhile to hire own developers for a single project. For this reason, the cost points listed are also primarily based on cooperation with an external software agency. If you are still looking for a professional team of developers to take care of the development of your custom software, you are welcome to contact us for a first non-binding consultation. We are looking forward to support you with words and deeds.


FAQ about individual software

Do you want to learn more about using custom software? Then you are right here at our FAQ! We will answer all your questions about custom software that have not yet been explained in detail in our article. If you still have questions that we could not answer, please feel free to contact us via our contact form or simply call us. We are happy to help you with any request.


  • What is custom software and how does it differ from standard software?

    Custom software is customized software that is developed specifically to meet the needs and requirements of a particular company or customer. Unlike standard software, which is used by many different companies and offers standardized features, custom software is tailored specifically to the specific needs and requirements of an individual company. Custom software can be developed either by an internal development team or by an external service provider.

  • How is the maintenance and support of the developed custom software performed?

    Maintenance and support of the developed custom software is usually performed by the developer or the development team. Regular maintenance is performed to ensure that the software runs error-free and smoothly. If any problems or bugs occur, they will be fixed by the developer or the support team.

    Maintenance and support can include different services, such as:



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from 20.01.2022

Hello, my name is Meike. I take care of the EXWE back office and am responsible for our social media channels. All of our articles are meant to make your life easier and help you make decisions. Nevertheless, it can happen that something remains unclear, so: If you have questions about this article you can easily reach me at +49 231 93149827.

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