Technology is the foundation of nearly every business in the world today, and the software you use often determines whether your business is competitive in its field. Therefore, it is important to invest in software development for your company. The cost of software development is determined by many factors. The complexity and size of the project, the technology used, and even the developer's geographic location will be reflected in the final price.
Software development costs
This is defined by the logic of the software and the number of different features it has. Note that not all features have the same implementation cost. For example, push notifications and video calls can have significantly different costs depending on the complexity of the code and the time required. Complex real-time data analysis with multiple permission levels requires different resources than, say, a fitness app with calorie counting functionality.
To provide you with a frame of reference, here are some common software development features and the approximate time and cost (based on a $25/hour rate) to implement them.
- search: $300-$500 for 12-20 hours
- Push Notification: $625-$875 for 25-35 hours
- Login: $750 to $1125 for 30 to 45 hours
- Edit profile: $1125-$1500 for 45-60 hours
- Payment: $1500-$1875 for 60-75 hours
- phone: $6500 to $9250 for 260 to 370 hours
Applications have also become a cornerstone of business these days, and costs depend in part on the software included in a company's mobile app. The average cost of creating an app is as follows:
- Minimum viable product: $5,000 to $20,000
- Simplified app: $20,000 to $60,000
- Average size app: $60,000 to $150,000
- Complex full-fledged mobile app: Over $150,000
These numbers vary from company to company and from individual project to individual project. These are just rough guidelines for what you can expect at this hourly rate. Some teams do not use such estimates and evaluate purely on a case-by-case basis.
There are many different types of software that consumers interact with on a regular basis. Depending on your business, you may need software packages such as PEO (payroll and employee recruitment) software or CRM (customer relationship management) software. These systems can be developed in-house or subscribed to through third-party systems, and costs vary. Weigh the pros and cons of each option before deciding which is best for your company. [Read more about the business cost of keeping software updated.]
Factors influencing software development costs
Before discussing software sizes, we first need to understand the definition of a screen in this context. A screen is a page, an open menu, or anything that appears after the user takes an action. For example, the Login page and the Change Password page are two different screens with different functionality. In this context, the size factor is simple. The more screens your software has, the more expensive your project will be.
Typically, small apps have 10 to 25 screens and a running price of $75,000 or more. Larger projects with more than 50 screens can cost upwards of $250,000.
Custom design makes your software stand out and more pleasant to use. The days of lime green text on a black background are long gone (though it's certainly an aesthetic that's still used today). UI/UX is what makes an application user-friendly, and that's what the “U” stands for.
The design process can be complex, depending on how extravagant you want an element and how many times you repeat it. The best designs aren't created perfectly the first time. These are developed through several feedback and redesign cycles. Additionally, the number of high-quality custom images drives up the price.
When your software requires many complex elements, such as high-quality custom images, it increases UX/UI design iteration cycles and costs.
3. Supported Platforms
Consider how many platforms you want your software to work on. Do you need a mobile app and want it to work on iOS and Android? You may need a cross-platform solution. Like any purely web-based service, desktop tools have their own nuances. All this is reflected in the price.
The accumulation of technology is not the same either. Some applications can be created with a single API. Some require front-end development in one programming language and back-end development in another programming language to work together seamlessly. This correlates with the complexity of the project, as different functions often require different technologies.
5. Development team
The number of people working on a project is directly correlated to cost. The same principle applies if you are paying for a dedicated team. Every developer, QA engineer, and project manager's time costs money. It's that simple.
The type of software development team affects costs. If your organization already has a dedicated IT team on payroll, you'll spend significantly less money creating software. However, ongoing wages can add up and cost more in the long run. Needless to say, many existing teams don't have the necessary knowledge or sufficient talent. In that case, you can either expand your staff with a dedicated team or outsource the process. Outsourcing is the most expensive option, but the quality of the projects you receive will also be higher. When choosing a software development team, ask relevant questions about the development process and the software itself.
6. Team location
The location of the development team also affects the price. Pricing varies widely depending on where your team is based. In the United States, you can pay up to five times as much for the same work done elsewhere. The important thing is to find a balance between cost and quality.
7. Ongoing maintenance
Software is never truly finished. You can always add new features, improve performance, or fix bugs you didn't notice. This is the benefit of the time and materials payment plan, which we discuss later in this article.No need to wait until you receive the final product to request changes
There's a saying in the industry that everything needs to be tripled in cost. This is largely a result of people opting for fixed payment models when they don't have a clear vision for the project in mind. The resulting product is different from what the client had imagined and requires extra spending.
The best payment model for software development
The two most common payment models are fixed price and time and materials. Which one is better depends largely on the size of your project and how your needs and requirements are defined.
This option is suitable for projects that are not subject to change and have clearly defined requirements. This means you pay the entire development cost upfront. This works for many clients, but comes with more risk. It's easy to lose control and communication with your team is limited. Also, when working on large projects, it is not uncommon to face delays. This model is suitable for small and simple projects.
For small, simple projects with clearly defined requirements, pay all development costs upfront.
time and materials
This is the more flexible of the two methods. Payments are made in stages rather than in one lump sum upfront. Depending on your contract, you can pay every two weeks, every month, or for any period of your choice. This approach gives you more control over your team and the entire development process. You can see the project every time a payment is made. This allows you to review reports, request additional features, and make other suggestions.
Additional reporting by Andrew Krylo.