Software Development Costs

The cost of software development depends on the requirements as well as other factors, and every software project is unique. Software, in itself, is in fact a broad term that we could not be certain of how much it costs until we know what the exact requirements are. 

In the tech-savvy world today, custom software development services abound, and the term could mean anything, from a weather app on your mobile phone, to an extensive company software used by clients. Business organizations use a profusion of different software, which lets them operate efficiently, enabling them to do and manage certain functions. All kinds of organization software are examples of business processes and software integration. 

When finding a custom software development company for your Business, your first consideration would be of course the cost. 

3 Key Factors of Software Costing

In trying to estimate how much software development will cost, there are three main factors that impact pricing. 

1. Software Project Type

Typical software development engagements, from a high level, tend to break down into these types:

  • New Development – new software, which involves custom application development
  • Software Modification – improving current software
  • Software Integration – custom code for more capability or integrate present software into other processes 
  • Web Development – custom software development that’s web-based

2. Software Project Size

Determine and estimate the project size. There’s a tendency for a tight correlation between the project’s complexity and its size, but this is not the case always. In general, project sizes fall into these categories:

  • Small. Usually, it involves minor changes. Things such as tweaks to the UI or bug fixes, which are well-defined, with a determined cause. Client interaction is limited.
  • Medium. Engagements are more substantial compared to a small tweak, but would likely have a scope of deliverables that are well-defined, and often are standalone solutions or integrations. Typically, it deals with one data source. Projects, like a web interface or a small mobile app to an existing inventory system, falls in this category. Compared to small projects, the external requirements for client interaction are more robust. 
  • Large. Solutions include more complexity and depth. Big projects may need integration with numerous systems, with a database component, and address logging and security features. A multi-party app that works across different platforms, such as Android, iOS and Web fall under this category. The external interaction with client requirements is very robust. 
  • Organizational. Organizational-level projects almost are exclusively built on an underlying framework. The security, logging, and handling of error is more rigorous. To these business-critical apps, data security and integrity are paramount. While support systems are not exclusive to this category, they are made to be resilient and could handle 2.-3 concurrent faults in the underlying infrastructure. A mobile app like Uber is an example. The external interaction requirements with the client involve the completely-integrated customer and IT teams. 

3. Size of the Development Team Per Project

Once a project is defined in terms of size and type, the next factor that you should determine is the size of the team. There are at least three roles to every project, including the project manager, the developer, and the QA tester. This however doesn’t mean that each role equates to a single team resource. Some resources are able to fulfill more than one role. 

In a small project, for instance, a developer could also fill the role of a tester, and the project manager could also fill the role of the business analyst, and so on. Rough estimates of the sizes of the team could include these structural roles:


Tips on Cost Management

Although you’re very cautious in considering the possible costs of your software project when setting up a budget, there’s no guarantee that it would come in under or at the set budget because there are a lot of variables that could cause it to go over the budget.  Nonetheless, there are several tips that could help you manage the costs and boost the likelihood that it would come less or at your target cost.

Document Clear Ideas

Write down what your goals are, and the features you want by priority, what needs you’re trying to meet, and so on would help make sure that everybody in the organization is on the same page. Effectively communicate with developers and state ideas clearly to make it easier for developers to communicate with each other and helps minimize wrong assumptions and miscommunication.  

Deploying Solutions Continuously

The time between the completion of code and when the app is available is required for feedback and making adjustments. However, the process is usually very complex. Various groups, which include the development team, release analysts, operations team, database administrator team, all have input. 


There are so many factors that impact how much does developing a software solution will cost. Calculation tools are available to do an estimation. Moreover, as earlier stated, each and every project is unique, and could not be costed with an exact formula. 

Nevertheless, defining the size and type of project, the size of the team, and resource costing could get you to basics when determining your budget range. The ideas for your project should be defined clearly to the development team, the features that you want to implement, and the goals. Write all of them, as well as what your needs are so everyone would be on the same page as you. 

The most straightforward way of estimating the cost of your software project is: Project Resource Cost x Project Time = Cost. This is unfortunately not that easy. Some resources may play more than one role on the project, and most don’t work full-time on a project. For instance, for someone in a design role, such as the UI/UX architect, there would be no reason for him to stay on the project eight hours a day. 

You need not pay for a full-time team as the costs are averaged based on the amount of work that every resource accomplishes per project. For instance, a tester’s effort is usually a percentage of the whole project and the tester’s cost will be based on this percentage. If you need a team for your project, you will be paying for a mixed set of skills, which means you get access to premium skills at a lesser cost because you only a percentage of that person’s time. 

By Anurag Rathod

Anurag Rathod is an Editor of, who is passionate for app-based startup solutions and on-demand business ideas. He believes in spreading tech trends. He is an avid reader and loves thinking out of the box to promote new technologies.