How to Calculate the Cost of Custom Development

| Updated on October 4, 2023

What is Custom Development?

Custom development of a software application is different from commercial—of—the—shell (COTS) software. It is a process of customizing the existing software or making new software according to a customer’s or an organization’s requirements. It can be developed by the internal developer or sometimes there is a need of hiring an external developer who costs more.

How Much Does Custom Development Cost?

Сustom development cost of a business is the cost incurred for developing, researching, and presenting a new customized software or application. The cost consists of research and development of custom software that includes marketing analysis, a survey conducted with customers, and the hiring of a developer. 

Why is Custom Development Cost Calculated?

Software development is a very critical phase for an organization. Similarly, customizing an existing software or creating new custom software proves to be more expensive for organizations than they think. If you choose a highly skilled and reliable IT company for your project, they will suggest a few options on how to optimize the expenses

When a client or organization wants to develop software, they first want an estimation of how much it will cost. If the estimation is wrong then all processes and the budget will be affected. There are several factors you should keep in mind while estimating the cost for custom development software.

Factors Affecting Custom Development Cost

Project Size

To estimate the cost of custom development software, you should keep in mind the size of the project for which the software is developed. If the project is small and has fewer requirements then the budget for developing software would be low.

Integration Between Apps

If the customer requires to integrate the app between website and mobile then it would also increase the budget.

Migration of Data

Developers hesitate to develop the type of custom software the needs migration to another platform as it consists of long lists of data scripts to migrate. It is a very time-consuming and difficult task.

Creative Design

If the customer wants a more creative app, the cost would probably increase. The developers would need to create a unique design that consists of font sizes, images, pellets of colors, including everything that differentiates the app from others.

How is the Custom Development Cost Calculated?

The total cost of custom software development = cost of front-end developer + cost of back-end developer + cost of QA + cost of PM.

The cost of custom development can be calculated in various forms.

Fixed Price

This form of the custom development cost allows clients to mutually finalize the price with the software developers. The client has to discuss all his requirements before the start of the work because once the deal has been done, it cannot be changed, otherwise, the client has to pay more for additional work.

Time and Materials

This type of custom development cost method needs the client’s day-to-day engagement. In other words, the developers require charges per hour or day. During the development of the software, the client thinks that he needs some changes in his work that can be done without additional cost.

L. Dias William


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