How much does software development cost?

For several decades now, software has been powering businesses and transforming industries. It became integral to how we manage business operations and think of competitive advantage. And it is no exaggeration to say it plays a huge role in how we imagine progress and future.

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To a greater or lesser extent, the majority of companies rely on software to transact, serve customers, handle sales and marketing information, manage their finance, power communications – and much more. Increasingly, code shapes our interactions and experiences of the world, from everyday living and working to healthcare routines, travel planning, learning and entertainment.

Software, the backbone of business and social reality

Great software helps companies perform better, optimise costs, and add value to their customers. It solves business problems. Oftentimes, it is at the heart of outstanding products and services that capture our imagination. It helps hospitals run better; it powers the infrastructure of communities and schools. In the broadest sense, it can help change societies.

In the digital age, businesses constantly apply and reapply software to their structures and processes, as the digital transformation progresses. They digitise, automate, and improve. Sometimes it’s a ground-breaking solution for years to come. Sometimes it is simply a matter of catching up, matching what competitors do. The software race accelerates as digital transformation gains further steam in the post-Covid recovery.

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How much should you pay for software?

The software also comes with a cost. Indeed, good software is not easy to build, let alone deliver to absolute client satisfaction. If you are running a digital transformation of any kind, you are well aware of this. Probably you have asked yourself (and others!) what is, in fact, the cost of software development. How should software be priced? Why does it sometimes seem expensive?

Being a software developer and business owner for almost 20 years, I am often asked about that. It is a question we hear at Infosit a lot, and it doesn’t have a quick answer. We usually say that software development costs should not be discussed in isolation from your business needs and the problems you expect to solve. Given that software is an investment, the cost and time involved in building it for your company or organisation are best understood regarding the return on investment (ROI) you expect to see.

Imagine you went to a builder and asked: How much does it cost to build a house? Most people would agree that a reasonable answer would be something like: “It depends. What type of house do you want?” Things like the number of bedrooms and bathrooms, square footage, and the quality of fixtures and fittings will impact the total cost of building a house. Other considerations include workforce expertise and how many people will be employed at each stage. And there are other things to keep in mind when planning and budgeting for house construction. An experienced and reliable builder will not attempt to offer a quote before learning more about the kind of house you want.

Scoping and sizing your project

It’s the same with software. If specific requirements are not known or have not yet been defined, it is difficult to say how much development would cost. Shaping requirements for a software project in the first place can take up quite some time, but if done well, it can do a great deal towards setting your project on the right foot. So when you first get in touch, we devote time and energy to understanding your needs and problems. Then we can scope the project more accurately and offer appropriate cost estimations.

We usually invite you for a kick-off meeting or workshop, which we conduct in a structured way to come to valuable realisations about what you want and need and understand what kinds of problems you look to solve with software. It allows us to uncover your requirements and priorities, which is the basis for structuring the project and discussing the price later on.

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The process can also be seen as information gathering and shaping your projects into a structure that can be sized and quantified per different parameters. The sum of all the requirements, wishes and needs we get from you is translated into a project that a software company can deliver. Once we arrive at the approximate project scope, we can give a cost estimation. At that point, we can also offer a timeline and project delivery and quality guarantees, which are essential to well-conducted software projects.

If you would like to discuss software development, download our document with two ways of approaching your project, and get in touch!

Goran Mrvoš, founder

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