What does the development of customized software cost?

by Meike Müller

The question of costs is usually asked at the beginning when planning customized software, but this cannot be answered at the start. This is because many factors play a role in the calculation. Only once these have been determined by you and your team can the approximate amount of the costs be estimated. In this article, we will break down which factors you should determine in advance and how the costs of custom software can be calculated.

Reading time 3 min

What you can expect in this article
  1. What cost factors are there in the development of custom software?
    1. Complexity or difficulty of the entire project
    2. Scope and number of functions required
    3. Creative and sensible UI/UX design
    4. Creation of the designSoftware integrations from third parties and possible license costs
    5. Migration of various data
    6. Rights of use
    7. Time required for the project
    8. The costs of other project participants
    9. Additional training
    10. Maintenance costs
  2. How can expenses be calculated?
    1. Our tips for low expenditure
  3. Your service provider for development
  4. FAQ
    1. How long does it usually take to develop custom software and what are the main factors that influence 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 carried out?

What are the cost factors in software development?

The cost range of customized software can be very wide, as different factors play a role in calculating the costs. After all, it is a completely individual software solution, which therefore has an individual price. It is therefore not possible to directly determine how high the final costs will be before starting a project. For a better estimate, you should consult with your software development service provider and plan the individual items that the software project should include. This will make pricing and subsequent programming easier. The following factors play a role in calculating the price:

The difficulty of the software development project

We start with the first point that is decisive for the final cost: the complexity of the project. What challenges will the programming staff face? Will new, perhaps unknown technologies or programs have to be used? Is it necessary to use complex security systems and safety precautions? All of these aspects can influence the project's expenditure. In particular, projects that require a high level of security also take more time.

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

Number of functions of the customized software

A decisive factor in determining costs is the number of functions that the customized software should have in the future. More functions also mean higher costs for the entire project. It therefore makes sense to define the functions at the beginning. The more complex the individual function, the higher the expenditure for a single function, because extensive functions require a particularly long time to create and a more difficult design.

UI/UX design and creativity

The intuitive use of the finished customized software is of great importance. After all, your employees or customers should be able to find their way around and use the application straight away. The goal is a positive user experience and this can be ensured by a well thought-out design. When calculating the costs of an individual application, it is therefore important to bear in mind that you will also have to pay a UI/UX designer. Depending on which technologies are used, for example Motion Design or Adobe, this can also have a financial impact.

You then plan with the UI/UX designer how fonts and colors should look, for example. Of course, every extra request costs more.

Design creation

Design creation directly affects two points. On the one hand, it also involves the technical design aspects that we have already described under the last point "UI/UX design and 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 retrospectively. If the design of the code is to be structured and orderly, the effort for the software developers is naturally also greater. This in turn is reflected in the costs.

Third-party software integrations and license costs

Depending on what kind of application is being developed for you, additional third-party integrations may need to be built in. Although this usually costs something, it is generally cheaper than a completely new development. This happens, for example, when files need to be exchanged between systems, payment options need to be integrated and so on. You should also bear the costs for licenses in mind when planning your development budget.

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, this must be backed up somehow and transferred to the new individual software. If the volume of data is particularly high, it is of course not worth transferring it manually. Individual scripts that automate the entire process are therefore also required for the transfer.

It also takes time to use this data correctly in the new software. How should the data be stored, has all the data been transferred correctly and where should it be used and displayed? 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 use the application developed by the programmers of a software agency individually, additional costs may be incurred for the so-called usage rights. The author of a code can assign the rights of use to you or several users in terms of time and quantity. If it is individual software, you can also ensure that only you receive the rights of use. Depending on the software agency, further expenses may be incurred here.

Time required for software development

Once all the 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. This is because software agencies normally charge by the hour. This will give you an idea of how long the project will take and what expenses you are likely to incur. Of course, you will only receive this information when you are already deeply involved in the project and not for your planning.

Resources of the project participants

Another cost factor 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 also be included in your cost planning for queries, updates and so on. The level of expenditure for the individual project participants naturally depends on their position and level of experience.

Software training

Once the programming is complete and the new system has been finalized, it may also be necessary to train all employees. So that they can use the software correctly and are informed about all the functions. Perhaps you can take on the training yourself and then only indirectly bear the costs of the employees who spend their time in training. Sometimes, however, it also makes sense for the external programmers who were involved in the software development to provide the training. The costs for the final training course are also included in the software offer.

Maintenance costs

After the software has been completed by the software development service provider, updates may need to be carried out from time to time. Servers or third-party applications need to be updated and brought up to date from time to time. Many software agencies offer this service, which is booked under maintenance and monitoring.

How can the costs be calculated?

As mentioned above, development costs are charged by the hour. You must therefore first sit down with the programmers at your software agency and determine all the important functions so that the programmers can provide a realistic time estimate. Then all you have 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. The end result is a fairly realistic total of your overall costs. But also bear in mind the point we've already touched on above: Not everything always goes according to plan, unexpected tasks come up for the development team and this results in further expenses.

Our tips for keeping software costs as low as possible

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

Another point that can save time and therefore costs is to let the developers decide on the technical details. These are, for example, the system environment and software components. This is where the programmers know best and can make a choice that suits them best and with which they can work most quickly.

Your service provider for software development

As a rule, companies opt for external developers when it comes to self-contained software projects. It is often not worth hiring in-house developers for a single project. For this reason, the cost points listed are primarily designed for cooperation with an external software agency. If you are still looking for a professional development team to take care of the development of your individual software, you are welcome to contact us for an initial non-binding consultation. We look forward to providing you with advice and support.

FAQ about individual software

Would you like to find out more about using customized software? Then you've come to the right place with our FAQ! We will answer all your questions about customized software that have not yet been explained in detail in our article. If you still have questions that we have not been able to answer, you are also welcome to contact us via our contact form or simply by phone. We are happy to help you with any request.

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

    Custom software is tailor-made software that is developed specifically for the needs and requirements of a particular company or customer. In contrast to standard software, which is used by many different companies and offers standardized functions, individual software is tailored to the specific requirements and needs of a single company. Customized software can be developed either by an internal development team or by an external service provider.

  • How is the maintenance and support of the customized software developed carried out?

    The maintenance and support of the developed individual software is usually carried out by the developer or the development team. Regular maintenance work is carried out to ensure that the software runs smoothly and without errors. If problems or errors occur, they are rectified by the developer or the support team.

    Maintenance and support can include various services, such as

What is your project? If you want to tell us about it, we'll call you back!

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.

You always want to stay at the cutting edge of technology Don't miss any more news and blog posts.
We also have the following interesting posts from our tech blog for you on this topic
Databases for companies: The big comparison of relevant databases

Which database is right for you? Find out! In our article, we compare well-known database applications such as MySQL and MariaDB.

Have applicant management / ATS programmed: Costs and process at a glance

Have applicant management / ATS programmed: Costs and process at a glance

Software quality assurance: How you can sustainably increase the quality of your software

Learn how to increase the quality of your software products! From ISO standards to clean code principles - this article offers practical insights and methods for effective software quality assurance.