Mobile Apps - WebsiteTech Blog

Custom Software Development Cost In 2023

By August 22, 2023April 11th, 2024No Comments

While technology has spread across various industries, many businesses are now considering custom software development as a must-have thing to meet their demands. It can offer a number of advantages, such as tailoring to your specific needs, easily modifying, reducing the risk of data breaches and creating unique features with competitive edge. However, custom software development cost is hard to project the exact number. The custom software development cost may vary from $50,000 to $300,000 and even more. 

In this article, we will provide a comprehensive guide to the average custom software development cost by region and size, factors that influence the price and explain how we estimate your custom software development cost.

Custom Software Development Cost

1. What is Custom Software Development

1.1. Definition

Custom software development is the process of creating software that is specifically designed to meet the needs of a particular user or organisation. This is in contrast to commercial off-the-shelf (COTS) software, which is mass-produced and designed to meet the needs of a board range of users

Custom software development can be used to create a wide variety of applications, including:

  • Enterprise resource planning (ERP) systems
  • Customer relationship management (CRM) systems
  • Point-of-sale (POS) systems
  • Medical software
  • Manufacturing software
  • Educational software
  • And many more

1.2. Custom Software Development’s Steps

Here are some of the steps involved in custom software development:

  • Requirements gathering: The first step is to gather the requirements for the software. This includes understanding the needs of the user or organisation, as well as the technical requirements.
  • Design: Once the requirements are gathered, the next step is to design the software. This includes creating the user interface, the database, and the programming logic.
  • Development: The development phase is where the software is actually built. This involves coding, testing, and debugging.
  • Deployment: Once the software is developed, it needs to be deployed to the user or organisation. This may involve setting up servers, configuring the software, and training users.
  • Maintenance: Once the software is deployed, it needs to be maintained. This includes fixing bugs, adding new features, and updating the software to keep it secure and up-to-date.

1.3. Why choose custom software development?

  • Tailor to the specific needs of the user or organisation, ensuring that it meets all of their requirements
  • More secure and reliable than COTS software, as it is specifically designed for the intended use
  • More cost-effective in the long run, as it can be tailored to the specific needs of the user or organisation and does not require customisation.

2. Average Custom Software Development Cost

How much does it cost to develop a custom software? There is no accurate answer to this question. The cost of software development varies depending on the complexity of the development

According to a 2022 report by Clutch, the average cost of custom software development ranges from $50,000 to $100,000. However, some projects can cost as much as $1 million or more.

Here is the price range by level of app development complexity in different regions in the world:

Source: GoodFirms

3. 10 Key Factors that Influence the Custom Software Development Cost

3.1. Platform

You may want to develop your software based on web, mobile apps or desktop operating systems. Before choosing, you should analyse the target audience of the product and know which type of platform has more usage rate. 

Developing software for a mobile platform is typically more expensive than developing software for a desktop platform. This is because mobile platforms require more specialised skills and knowledge, and the development process is more complex:

  • Mobile platforms are more complex than desktop platforms. They have smaller screens, different input methods, and different operating systems.
  • Mobile development requires specialised skills and knowledge. Developers need to be familiar with the specific platform’s SDK and development tools.
  • The development process for mobile apps is more complex. Mobile apps need to be optimised for different screen sizes and resolutions, and they need to be able to run on a variety of devices.

Moreover, regarding mobile app development, the  number of suitable device screen sizes for Android apps is much larger than for any iOS app, therefore all cost differently.

From our research, here is a table that shows the average cost of custom software development for different platforms:

custom software development cost

However, you can consider Flutter app development, which could help you build software products running on multiple platforms: iOS, macOS, Windows and Android. This could reduce your software development cost up to 50%.

3.2. Software Complexity

The price of custom software development depends on its complexity. You should consider the number of screens, workflow, automation requirements, process deployment, methods and many other factors. The more features you want to implement through coding, the more complex your product will be, thus increasing both time and overall cost.

3.3. Project Size

The size of the software can also affect the cost of custom software development. A larger software project will typically require more time and resources to develop, which will increase the cost as they have more features and functionalities, a larger user base, and complex development. 

As the number of pages increases, so does the amount of work required in the development process. The development cost also increases. Small applications range from 10-25 screens, medium size are in the realm of 25-40 and large are anything more than 40.

Most startups start their business with an MVP (minimum viable product). In addition, building an MVP would take a part of around 20-40% of your total development budget. But it is still worth it because users’ feedback could help you focus and well-complete your product, thus optimising your time and cost. Many startups choose to outsource their MVP Products as it helps them to start without big investing resources. Some famous companies that have outsourced their MVP development are: SeatGeek, Groove, Whatsapp and Slack.

3.4. UI/UX Design

As the end-user experience market grows, more innovative and sophisticated UI/UX design methods are being created. A well UI/UX design can lead to increased user satisfaction and retention, which can save money in the long run.

In general, the cost of UI/UX design will vary depending on the complexity of the design, the experience of the designer, and the software platform. The average cost of UI/UX design is in the range between $5,000 and $50,000.

If you are considering developing a mobile app, it is important to factor in the higher cost of UI/UX design. However, the benefits of good UI/UX design can outweigh the cost, especially if you want to create a user-friendly and engaging app.

3.5. Backend development

The backend requirements for custom software development can affect the cost of the project in a number of ways:

  • The type of data storage and processing that is needed: The type of data storage and processing that is needed will affect the cost of the project. For example, if the software needs to store a large amount of data, this will require more expensive data storage solutions. Similarly, if the software needs to process a large amount of data, this will require more powerful servers and more computing power.
  • The level of security that is needed: The level of security that is needed will also affect the cost of the project. For example, if the software needs to store sensitive data, such as credit card numbers or personal identification information, this will require more expensive security measures.
  • The scalability of the backend: The scalability of the backend will affect the cost of the project. For example, if we expect to have a large number of customers using your software product, this will require the backend to be scalable to handle the increased traffic. This can be achieved through a variety of methods, such as using cloud computing or load balancing.
  • Integration with other systems: The backend needs to expose APIs that allow other applications to interact with the software. This allows for integration with other systems, such as e-commerce platforms, CRM systems, and marketing automation platforms. Using APIs is a great way to implement backend functionality with lower custom software development costs.

3.6. Development Strategy

When developing, you’ll want to choose a methodology of development that is quick, dependable and error-free. One popular method is agile development.

Research has said that 95% of respondents claimed that their firm utilised Agile development methodology to reduce the average cost of custom software development. In general, agile methodologies tend to be more cost-effective than waterfall methodologies for custom software development. This is because agile methodologies allow for more flexibility and adaptation to changes, which can help to reduce the risk of scope creep and delays. However, agile methodologies typically require more communication and coordination between the development team and the stakeholders, if your team has less experience in this methodology, it will lead to increased costs.

>>> Read more: Top 10 Agile Software Development Methodologies to Build a Great App

3.7. Testing

Quality assurance is extremely important for the development process. It is crucial to test every component of the software in order to identify any flaws in the software code and validate your app’s alignment with the predefined requirements. QA staff can validate where the end product is competitive, secure and user-friendly. The costs of testing in software development always depend on the complexity of your project.

3.8. Location

The location of the development team also affects the cost. Developers in developed countries (such as the United States, Canada and Western Europe) typically charge more than developers in developing countries (including Vietnam, China, India, etc).

If you choose a software outsourcing company, you can opt for overseas teams to reduce custom software development costs. Hourly rates vary by geography and business value, ranging from $25 to $130 per hour. Let’s look through offshore software development rates from different regions in the world.

Source: Fulcrum Rocks

3.9. Developers’ Levels

In general, developers with higher levels of experience and expertise will charge more than developers with lower levels of experience and expertise. 

  • Junior developers: Junior developers are typically recent graduates with less than 2 years of experience. They are typically the most affordable option for custom software development, but they also come with the highest risk. Junior developers may not have the experience or expertise to complete complex projects on time or within budget. They often know only one programming language or framework, so they are unable to work as fast as possible. You should think well before hiring them.
  • Middle developers: Middle developers have 2-5 years of experience. They are typically more experienced than junior developers, but they are still relatively affordable. Middle developers can complete most projects on time and within budget, but they may not be able to handle the most complex projects.
  • Senior developers: Senior developers have 5+ years of experience. They are the most experienced and skilled developers, and they typically command the highest salaries. Senior developers can complete any project on time and within budget, and they can handle the most complex projects.

To conclude, the more complex your projects become, the more skilled engineers you need.

3.10. Hiring option

There are three main software developer hiring options when developing your app:

  • In-house team: Hiring developers in-house is the most expensive option, but it is the most cost-effective way in the long run. This is because you will have direct control over the development process and you will not have to pay any third-party fees. However, it is important to factor in the cost of salaries, benefits, and office space when considering this option.
  • Freelance: Hiring freelancers is a more affordable option than in-house development, but it can also be more risky. This is because you will have less control over the development process and you may not be able to find freelancers who have the skills and experience you need. However, it is a good option if you have a limited budget or if you need to complete a project quickly.
  • Outsourcing vendor: Outsourcing development to a third-party development company is a good option if you need to complete a project quickly or if you do not have the in-house resources to do it yourself. However, it is important to do your research and to find a reputable development company that has the skills and experience you need.
  • IT staff augmentation: This model helps the company rent executives from a particular company. For instance, you only need one or two developers for your current project, some companies will offer you just the expert you want, so you will not need to hire and pay for the entire outsourced team. Those people will work with you during the contract time, remotely or face-to-face, based on your demands. 

4. How AgileTech Estimates the Custom Software Development Cost?

In every project we were, are and will join, AgileTech always starts with a discovery phase. After you leave a request, our business development executive will contact you within 48 hours to schedule a free 30-minute consultation for your project.

While consulting, we will ask you a series of questions to assess your goal, solution requirements and business needs:

  • What was the goal of your software product?
  • Which problems does your app aim to solve?
  • What are the unique features expected to appear in your product?
  • What platform will suit your product?
  • Are there any design or branding requirements?
  • Do you want to integrate any existing systems or data into the solution?
  • What is your budget estimation?
  • Will your software product need ongoing maintenance and support?

After gathering information and understanding thoroughly, we will prepare a two-step process for estimating the cost of your own custom software development project.

4.1. Rough Estimation

This step is just for informative purposes, as it provides a guideline to help your business know how long it will take to complete your project and what results will expectedly happen. After receiving the project’s goals, solution requirements and demands, this estimation will include demand features, budget, quality levels, tasks and challenges for the development team. 

Our team will try our best to make it as clear and concise as possible and are happy to answer all clients’ questions so they can understand the guideline thoroughly.

4.2. Detailed Estimation

This step will be carried out with the participation of all developers who will be actively involved in the project. Based on the project description and our research, we will provide an estimation including

  • Technical Scope
  • Feature Breakdown Roadmap(broken down into phases and sprints)
  • Techstack
  • Development Timelines and Acceptance Criteria
  • Team Structure

This is just a simple phase with all the requirements in detail for MVP and the future phases.

Wrap up

The cost of custom software development can be a major factor in deciding whether or not to pursue this option. Custom software development cost estimation is much more complicated than we expect. There are various factors that need to be considered before development, both technical and non-tech. However, by understanding the factors that affect the cost and by taking steps to reduce costs, you can make custom software development a more affordable option for your business.

We all hope that this post has given you the information you need to start building your custom software product. Good luck!

However, if you need services right here and now, we offer you our expertise. When you choose to work with AgileTech, you will receive huge tech support as we got 8 years of software development experience with diverse industries and technologies. We have a proven record of building high-quality custom software products for clients around the world. If you need further information and consultation for your project, feel free to fill out this form to meet our IT experts!