Our guide to understanding how much custom software costs to design and develop.
Custom software development is a complex process that encompasses various types of projects, each with unique requirements and price points. It involves a range of activities from initial concept and design to development, deployment, and maintenance. This guide aims to provide an overview of the costs associated with custom software – and what is involved at each stage – helping businesses plan their investments wisely.
Price ranges for different types of software builds
The cost of custom software development can vary widely depending on the type of project. Factors such as complexity, platform type, integrations, features, and the expertise required to build the final the product will affect the bottomline cost of investment.
Development cost estimations per type of project and application:
Mobile app development ranges from simple applications with basic functionality to complex platforms with advanced features such as payment processing, GPS tracking, or augmented reality. Prices typically start at $50k USD for a capable but limited mobile app, with more complex mobile apps fetching prices of $100k to $250k USD or more, always depending on requirements and the range of features included in the build. The chosen technologies also come into play for mobile app development, as utilizing a hybrid development technology that can deploy both iOS and Android mobile applications using the same code base can help keep costs lower.
Costs at a glance:
- A simple mobile app may cost around $75k USD.
- A more complex e-commerce app with unqique designs, integrations, and other features could exceed $200k USD.
Web apps require a different set of skills and technologies and can be slightly less expensive than mobile apps. A basic web application might start around $40k USD, while an advanced system with high traffic capacity and numerous integrations could reach $200k USD.
Costs at a glance:
- A small and relatively simple web app costs around $80k USD to both design and develop.
- A large-scale online marketplace with custom integrations might reach $300k USD.
Enterprise custom software development
This category includes software designed to cater to the specific processes and needs of a business. While starting prices are around $100k USD, the scale and complexity of such projects means costs often escalate beyond $400k USD.
Costs at a glance:
- A custom “enterprise” light system for a mid-sized business may start at $100k USD.
- A supply chain management system for a large company or document management system for a compliance company could exceed $300-400k USD.
- An edtech platform for a medium size business could cost upwards of $250k USD.
SaaS platforms are subscription-based and need to be highly scalable and reliable. Initial development costs start at $90k USD and for robust, market-competitive platforms, can go upwards of $300k USD.
Costs at a glance:
- A project management tool for small teams may cost about $80k USD.
- An enterprise-level SaaS product with advanced capabilities and integrations could exceed $500k USD.
Why do prices vary so much?
You will notice that we have included price ranges in our product development cost estimations as a standard, with costs from $40k up to $400k across assets. There is a substantial amount of variance, but why is this?
Let’s explore the main factors that influence the price in more detail.
The size of the software
This is the principal determinant of cost, particularly at the beginning of a project. We give examples above of the difference between a simple and complex product.
Taking the mobile app as a reference, a simple app may cost around $50k while a complex one will exceed $250k. There are a number of factors that impact cost due to size, but the biggest is simply that it requires more work.
A large project will require a larger team with more specific skill sets. This will have knock-on consequences in costs.
The complexity of the software
A larger project inevitably means more complexity – but the reverse is not necessarily true. Small projects can still be complex. What you want your software to achieve will influence complexity, even if the project is not considered “large” in a traditional sense.
Our work with the insurance sector is a good example of this. Developing apps or programs for insurance underwriting involves complicated logic. These software solutions have to deal with heavy analysis, numbers, and other factors to produce accurate results for underwriting.
Want to find out more? See our case studies.
Complexity on its own is not desirable. Strong software development partners will work towards essential complexity, while avoiding incidental complexity. This means:
- Good code quality. If not careful, complex projects can lead to bloated code with lots of bugs and issues. High-quality code is essential for complex projects to ensure easy maintenance and ensure overall performance.
- Better security. Messy code opens companies up to security breaches. Quality builds are essential for complex projects to avoid putting your company or customers at risk.
The creativity of your design and extent of your product's functionality:
Did you know that 94% of a website, app, or platform’s first impressions are a direct result of its design?
Companies understand that the UX of their software is a key value differentiator. And this can include a huge number of choices and options. It’s safe to say that design goes far beyond playing around with fonts, colors, images – although this side also serves an important function.
Nowadays, UX can include:
Your specific design needs will influence the cost of the project.
Systems integration capabilities and connections
Does your software need to interact and integrate with other systems?
A typical example of this would be any ecommerce solution. To process payments via your asset, you will need to integrate payment providers such as Stripe, PayPal or Authorize.Net, etc.
While these integrations are relatively simple, if you want a custom CRM for a mid-sized enterprise, you will need a large number of integrations. In some cases, this may involve creating APIs to link with older or more obscure systems, which can be challenging.
The more difficult or the higher number of integrations necessary can have an impact on the price.
The migration of existing data
Very few companies are starting entirely from zero when it comes to investing in new software solutions. Most will have data in an existing system that needs to be transferred to the new one.
Migration is a standard part of most custom software projects. That said, the process can be time consuming, according to the various translation rules, writing the scripts, and performing tests and adjustments.
Determining project lengths
The timeframe for developing custom software can vary as much as the cost, influenced by the project's scope, complexity, and the methodology adopted.
Length at a glance
- Mobile Apps: Typically can take around 6 months to develop.
- Web Apps: Development can last between 7-10 months.
- Enterprise Software: With more extensive requirements, development can take 12 months or more.
- SaaS Platforms: Usually require 10-14 months to reach a market-ready state.
Please note that these product development cost estimations are based on our experience with real customers. That said, no two projects are the same. As a rule of thumb, the time of development is proportional to the complexity. A $50k USD mobile app will require less work (and less time) than a $250k USD one.
What’s important is to be entirely up front at all stages. When assessing a project, we will give a time estimate based on the information we have at that time. If any changes happen during the project, this may affect the time to delivery. This will be clearly communicated before the changes are agreed.
Dealing with changing requirements and budget adjustments
The flexibility of the development process is key when it comes to changes in project scope or requirements. Here’s how different pricing models can accommodate such changes:
This model works best when the scope is clearly defined from the start. However, if changes are necessary, they can often result in additional costs and the need to renegotiate the contract.
Time & materials (T&M)
Under T&M, clients pay for the actual time spent on the development, which allows for more flexibility and responsiveness to change. This model is suitable for projects where requirements are not fully known in advance.
With dedicated teams, clients pay for the developers’ time on a regular basis, which can lead to a more collaborative and adaptable development process. This model is ideal for long-term projects that may evolve over time.
Choosing the right pricing model is crucial for managing your budget and ensuring the success of your project:
- Fixed Price: Good for small to medium-sized projects with well-defined requirements.
- Time & Materials: Suitable for projects with dynamic requirements that can change during the development process.
- Dedicated Teams: Ideal for ongoing projects that require constant development efforts and expertise.
Price differentials depending on the project or operating model
The final cost of a project can also be influenced by the operating model chosen for the development process:
- In-house development. Generally, the most expensive option due to overhead costs.
- Outsourcing: This can be cost-effective, especially if offshoring to countries with lower costs of living and costs of business.
- Hybrid models: Combining in-house and outsourced resources can balance costs and control.
Nearshore outsourcing The Asymm approach
At Asymm, we follow a model called nearshore outsourcing, which we find provides the best price-quality ratio for our customers.
Nearshore outsourcing is the same as standard outsourcing but with one key difference – geographical proximity. In our case, we are located in California and our nearshore team is located in Mexico.
Project outsourcing vs. nearshore staff augmentation
We offer two models of nearshore outsourcing, based around the above ideas of “outsourcing” or “hybrid models”.
1. Nearshore project outsourcing
The first is full project outsourcing to our expert nearshore team. With this approach, you would get access to all the skills necessary to bring your project from ideation to deployment. This would include everything from project management to development to quality assurance professionals and more.
Expect to save around 25% when compared to standard project outsourcing in the United States.
2. Nearshore staff augmentation
The next is nearshore staff augmentation, which is a hybrid model that allows the company to retain greater control of the project. Instead, this model provides access to the skills that are missing in-house.
When following this approach, the customer is the main responsible for day-to-day operations and the progress of the project.
Expect to save 30% when compared to standard staff augmentation in the United States.
The benefits of having a nearshore partner
The physical proximity to our outsourcing team has a number of benefits for our customers.
- Cost savings. The primary benefit for customers is that nearshore outsourcing is more budget friendly as the cost of business is lower in Mexico. This is true for both augmentation and outsourcing when compared with in-house or standard outsourcing alternatives.
- Access to skilled professionals. Getting access to a full team of skilled professionals with standard outsourcing is cost prohibitive for many. On the other hand, working with outsourced individuals can be risky in terms of quality. With nearshore outsourcing, you get the perfect mix of quality and price.
- Increased flexibility.* Incorporate experienced professionals into your team as and when you need them, whether during a project’s critical phase or due to seasonal demand.
*Specific to nearshore augmentation.
Ongoing maintenance is a natural part of the software development lifecycle that is often overlooked or downplayed in initial cost assessments. If you buy a car, you expect a certain level of maintenance – but it should be the exception, especially if the car is new.
Software is different. Besides bug fixes and corrections, technology changes with lightning speed. For this reason, constant fine tuning and updating is needed as part of the process.
Costs at a glance
- Mobile/Web Apps: Typically require an annual maintenance cost of 15-20% of the original development cost.
- Enterprise Software/SaaS: In addition to regular updates and bug fixes, these may also include server costs, security updates, and customer support services.
Types of maintenance costs
In general, we can expect four types of maintenance costs:
- Corrective Software Maintenance. This is the “classic” maintenance where you correct any faults, errors, or bugs that appear. Ideally, you want these to be addressed before users discover them.
- Preventative Software Maintenance. Nipping it in the bud – upgrades, adaptations, or identifying any latent faults that may become problems.
- Perfective Software Maintenance. Adding new features or requirements that are necessary to improve functionality. It can also involve removing features that turn out to be ineffective or irrelevant in real-world usage.
- Adaptive Software Maintenance. The final type involves overcoming challenges such as changing technology, new rules and regulations, or operating system changes, etc. As the world changes, your software must change too.
Sample maintenance process
An active, ongoing approach to maintenance is necessary to cover all bases. Here is a sample of what that might look like.
- Identification and tracing. Whether user-generated or identified by the developer, this involves discovering what part of the software needs attention.
- Analysis. Looking at the suggested modifications and the effects of adjustment. This will often include a cost analysis to determine whether it makes sense financially.
- Design. As with initial software development, the new changes need to be designed.
- Implementation. Once designed the developers need to implement the changes.
- Testing. How do the new changes interact with the system or the module?
- Acceptance. Find sample users to give opinions about changes – developers should listen to them and take note.
- Delivery. The final stage where the software is updated or installed for the customers.
Would you like a project estimate?
Understanding the full scope of costs associated with custom software development is essential for any business. By considering the types of projects, lengths, pricing models, and maintenance costs, organizations can better prepare for the financial commitment of bringing their software visions to life.
Of course, the only way to find out exactly how much your project would cost is by getting a quote. At Asymm, we offer personalized consultations where we listen to your needs, vision, budget and more.
If you would like a project-specific quote, simply reach out to us today and we will get back to you as soon as possible.