Building custom software for your business is a smart move in 2021. Mobile apps — one of the most obvious examples of custom software — are predicted to make over $935 billion worldwide in the next two years alone.
But how will a developer create your custom software, and how much will it cost? These factors differ vastly from one project to the next, depending on how your developer works and what you want your software to achieve. Below, we’ll break down exactly what goes into making a custom app so you can see the steps involved and budget correctly for the work you need.
What Are the Advantages of Custom Software Development?
Successful software is more than just engaging — it’s also unique. Mobile apps are a perfect example. Do you think Instagram or Uber would be so successful if they were easy to replicate? Absolutely not.
Investing in custom software gives you a solution that is tailor-made for your business. Every feature in a custom application is designed to support a product or service that your business offers, which improves user experience and ultimately increases revenue.
Custom software isn’t just for smartphone apps, either. In fact, the more specific your company’s niche is, the more custom software can streamline your operational efficiency. For this reason, many B2B companies also benefit immensely from custom software development.
For example, let’s say your company provides mental health counseling services. A custom app could improve your payroll by extracting information from your scheduling software and automatically generating invoices for both patients and counselors. Sure, you could probably do that manually in an off-the-shelf program like Quickbooks — but the time you save with a custom app allows you to run a better practice and focus on growing the business.
What Does it Take to Bring Your Idea to Life?
Creating successful custom software requires a great deal of planning and decision-making. You’ll need to work closely with your developer to firmly establish your project’s goals and create a plan to ensure the finished product achieves them.
Scoping Needs & Analysis
The first step in creating any custom software is to meet with your developer. During this meeting, you’ll communicate your requirements to them in as much detail as possible so that they can accurately determine your needs and provide you with a ballpark quote of the costs involved.
There are two different ways to quote the costs for custom software, which we’ll address momentarily. For now, though, just remember: the more you can tell your developer about what your software needs to do, the easier it is for them to give you an accurate quote for the work. Your developer needs to know:
- What kind of work your business does and who the software is intended to serve
- How many features you need your software to have
- What APIs are required for the backend of your software (see “Technology & Integration” later in this article)
- How complex the design needs to be
- Whether your software is being developed for a single operating system (native), multiple operating systems (hybrid), or the web
These factors are all significant, but extra features are by far the single largest contributor to the cost of custom software. We’ll explain how to prevent them from inflating your software’s price in the “How Costs Are Determined” section of this article (below).
Once your developer has determined your project’s scope, their next step should be to break it down into different stages or milestones. We go through the following milestones when creating custom software for our clients:
- Generating wireframes: these schematics function as a blueprint for building your software. They provide a visual representation of the application’s structure and features. Generating wireframes usually takes 1-2 weeks for most custom software projects.
- Graphic design: once the basic wireframes are approved, we engage a graphic designer to create a high-fidelity version that more closely resembles the finished product’s appearance. Hi-fi wireframes for custom software usually include transition animations between screens and other visual details that help evoke the end user’s experience.
- Development phase: after you approve the wireframes, we begin building the software itself. We use agile software methodology to allow for changes to the end product without driving costs up unreasonably.
- Delivering weekly demos: each week, our team provides you with a demo of the software to help you stay up to date on the project and make any necessary changes. Using agile methodology puts you in complete control of how much time and money you want to spend making adjustments.
Development Methodologies: Agile vs. Waterfall
Not every custom software developer uses agile methodology. Many agencies that outsource the brunt of their software engineering duties use the waterfall method instead.
The critical difference between these two methods lies in their flexibility. Waterfall methodology requires the client to define the scope of their project entirely at the front end, and the developer charges for each feature the client wants. That means if you decide to make changes while they’re building the software, you’ll have to pay a change order fee (generally between $1000-$5000, since change orders are billed hourly). Since you’ll pay a fee for each new feature you want, these costs can quickly add up and put a project over budget.
We prefer to use agile methodology for two reasons: it doesn’t base its prices on features, and it lets our clients make changes without being penalized. Instead, we base our front-end quote on the amount of time we expect each project to take, and the client retains us for a specific number of hours each month during the development process. Once you’ve paid for those hours, you can assign us to do anything you want with them — including add new features.
Technology & Integration
Almost every piece of custom software relies on application programming interfaces (APIs) to communicate with other programs. Put simply, APIs let apps “talk” to each other. In our earlier example, a specific API in the counselling company’s scheduling program allows their custom software to pull information from it and compile invoices.
Services such as Amazon API Gateway allow developers to create, publish, maintain, monitor, and secure a wide variety of APIs. As Select level consultancy partners with Amazon Web Services, we enjoy reduced rates on these services and can pass the savings down to our clients.
How Costs Are Determined
The costs for custom software vary widely depending on the required features. A relatively simple program such as the loyalty app for a coffee chain might cost about $75,000, whereas a multi-feature social media app could cost $250,000 or more. However, the developer you choose and the methodology they employ can have a massive impact on the final price — especially if your project experiences scope creep.
What is Scope Creep?
Scope creep occurs when the size of a project keeps expanding even after development begins. Basically, scope creep in custom software development is when a client wants to add features that weren’t in the original plans for the application.
Scope creep can make custom software development extremely expensive if your developer uses waterfall methodology — since they’ll likely charge thousands of dollars for each extra feature you want to add. The final cost of an app developed with waterfall methodology ranges from $75,000 to $500,000.
Custom software developed with agile methodology can still be expensive if the project is complicated, but keep in mind that you’re only paying your developer for their time. If you have unused hours available in your package and want to use them to add new features, scope creep isn’t a problem. The final cost of an app developed this way is anywhere from $30,000 to $500,000 — potentially much cheaper. Projects created with agile methodology are also 28% more likely to succeed than software developed with waterfall methodology.
Other Costs to Consider
All custom software comes with hosting and maintenance costs in addition to the cost of developing it. If you don’t plan on adding additional features to your app, maintenance costs are usually about $5,000 per year.
Hosting costs depend on the requirements of each app. Hosting a startup app with a small pool of users could cost as little as $150 per month, whereas a massive social media platform with millions of users might cost as much as $10,000 per month.
Investing Intelligently in Custom Software for Your Business
Custom software can streamline tedious operations, make your company more productive, and generate revenue. However, it’s also an investment that you need to approach with caution if you want it to work wonders for your business.
The trick is to create a plan for developing the software that lets you make essential changes without going over budget. When you choose a versatile developer and communicate your needs clearly, you’ll be able to create invaluable software that is only limited by your imagination.