The modern customer-centric tech world forces companies to build custom solutions to meet the specific needs of their users. More and more businesses prefer developing custom solutions as opposed to off-the-shelf ones to gain a competitive edge and win over customers. Even despite the elevated software development costs of custom platforms, businesses acknowledge the benefits of having a tool tailored to their needs. What goes into the effective estimating of software development costs and smart project planning? In this article, we will investigate the average costs of software development and try to pinpoint the aspects that increase the price tag.

 

Quick Facts: Software Development Costs

  • The development cost of a basic eCommerce system, CMS, and SaaS software is, on average, from $25,000 to $100,000. CRM, ERP, and SCM software prices start at $100,000 and can exceed $300,000+.
  • The average software developer rate in the US is $80 - $100 per hour. In Western Europe, it is $60 - $80 per hour, and in Eastern Europe - $35 - $60 per hour.
  • An experienced software development team can create a working MVP in 2 months or 800 hours. The price for such an app will range from $30,000 to $45,000. Medium-sized software will take 4-6 months or 2000 hours to develop. Large-scale apps take over 6 months and cost $100,000+.
  • Development of an alternative to popular apps such as Uber, TikTok, and Zoom costs between $80,000 and $110,000. More complex software like Booking will cost $150,000 - $300,000 to develop.

Average Cost of Software Development
(by types)

Before diving into the concrete factors that influence the software development costs, let’s take a look at the typical features, types of projects, etc. What are the most common types of custom software solutions and how much does it cost to develop software in 2024?

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Content Management Systems (CMS)

software development costs cms

Some companies choose to build a custom CMS to meet the specific needs of their users. CMS serves as a tool to create and update content, for example, blogs, press releases, and even videos. With the usage of additional plugins and libraries, your website can become a powerful way to promote your business. For example, with WordPress media folders, you can organize and manage files; Yoast SEO helps to optimize your website, etc.

Although you can simply use an off-the-shelf solution like WordPress or Magento, going with a custom tool could be beneficial. Regardless of the customizability of modern CMS platforms, a custom-made software solution is much more expandable and even potentially profitable. Especially businesses with new and unique products or services would gain a lot from custom software development, as they can later offer it outside of the company and generate additional income.

CMS software development costs: from $20,000 to $50,000 for a basic platform with design, a few custom features, configuration, and so on.

 

Examples of the Best CMS Platforms

1

Shopify

Best for: eCommerce sites

Year of creation:

2006

Shopify is a leading eCommerce CMS focusing on making online selling easy. It features a built-in payment processing and shopping cart system. Also, it has a user-friendly interface and 24/7 support. While it’s powerful for online retail, it’s relatively basic for traditional content management. Shopify is ideal for those who want to set up an online store quickly and efficiently, with pricing plans that cater to various business sizes.​

Year of creation:

2006

2

HubSpot CMS Hub

Best for: Marketers and business owners looking for a unified CMS and CRM solution

Year of creation:

2006

HubSpot CMS Hub is an integrated content management system built on top of HubSpot’s CRM platform. It’s designed for ease of use with a drag-and-drop editor and has built-in SEO tools. Ideal for businesses looking to integrate marketing and CRM infrastructure within a CMS. The platform offers various tiers, starting with a free plan, and is particularly suited for growing businesses and large enterprises​​​.

Year of creation:

2006

3

WordPress

Best for: Businesses with unique website needs

Year of creation:

2003

WordPress is the world’s most popular CMS, powering around 43% of all websites. It offers vast customization capabilities with thousands of themes and plugins. Known for its flexibility, it allows the creation of various websites, from blogs to e-commerce stores. It’s free but requires hosting and domain name, and users are responsible for security and backups​​​​.

Year of creation:

2003

 

Customer Relationship Management Systems (CRM Systems)

CRM systems incorporate various tools that help businesses keep track of their customers, win over potential clients, and manage vendor and partner relationships. There are hundreds of CRM systems on the market, from complex to basic and simple. However, companies with unique management approaches or target audiences might benefit from a custom CRM platform. Besides, CRM systems usually come with a scalable pricing structure that makes them quite an investment for a large company. Are you looking for the best CRM software? Creating a bespoke tool, in this case, might not only deliver you a software solution that perfectly suits your needs and requirements but also save you money.

CRM software development costs: on average, $100,000 for a platform with a basic set of features, plus a few tailored functions. However, large and complex CRM solutions like Hubspot, Salesforce, Freshsales, etc. might be up to $600,000+.

 

Examples of the Best CRM Systems

1

Salesforce CRM

Best for: Businesses needing vast customization

Year of creation:

1999

Salesforce is recognized for its extensive selection of CRM products and customizability. It caters to various industries with modern sales features, including social media engagement for lead generation. Salesforce also includes AI-powered tools for data analysis and app creation. Additionally, it integrates with many other platforms, such as Quickbooks, MailChimp, Jira, ActiveCampaign, etc.

Year of creation:

1999

2

monday sales CRM

Best for: Businesses needing integration of project management with CRM functionalities

Year of creation:

2022

monday sales CRM is part of the monday.com platform and is known for its project management capabilities. It offers intuitive interfaces, customizable dashboards, and advanced automation features. The CRM is designed for ease of use and is highly adaptable, making it ideal for businesses that require a combination of CRM and project management.

Year of creation:

2022

3

Quickbase

Best for: Businesses seeking a customizable, no-code CRM solution

Year of creation:

2002

Quickbase provides a flexible, no-code platform that allows businesses to create a CRM system according to their specific requirements. It’s adaptable and includes features like drag-and-drop workflow automation and file attachment space. Quickbase is especially suitable for users with some technical aptitude, offering a customizable CRM experience.

Year of creation:

2002

Enterprise Resource Planning Systems (ERP Systems)

software development costs erp

ERP systems are built to help businesses manage their daily operations such as accounting, compliance, supply chain tasks, project management, procurement, etc. A small company can afford to use an off-the-shelf solution, but as businesses grow, the number of daily tasks increases. At the same time, the earlier you invest in a custom ERP solution and start using a system tailored particularly for your business needs, the quicker you will gain the benefits. Having a custom ERP tool at hand is beneficial for any growing business, especially in less saturated industries. A scalable solution tailored to your needs and requirements will definitely cover your back and allow you to focus on the product itself. So, if you’re planning to build one from scratch, you may choose Java, Python or ASP.NET software development, for instance.

ERP software development costs: from $100,000 and more, depending on the number of features and size of the company. The sheer amount of data in large enterprises requires more advanced features for ERP solutions. This way the cost of such solution development can increase to $150,000 – $500,000.

 

Examples of the Best ERP Systems

1

Oracle NetSuite ERP

Best for: Diverse businesses, including small, medium, and large organizations

Year of creation:

1998

Oracle NetSuite ERP offers a comprehensive suite of cloud-based services and solutions for small, medium, and large organizations across various industries. Its capabilities include financial management, inventory management, HR, analytics, omnichannel commerce, and more. The platform is designed to help organizations grow, scale, and adapt to changes in their industry.

Year of creation:

1998

2

Odoo

Best for: Growing businesses looking for scalability and simplicity

Year of creation:

2005

Odoo provides a range of business management applications, including CRM, e-commerce, inventory management, accounting, and more. Thanks to its open-source nature, there are more than 100 thousand developers contributing to creating over 40 thousand community apps. Odoo is known for its flexibility and scalability, making it an accessible option for growing companies.

Year of creation:

2005

3

SAP S/4HANA Cloud

Best for: Large enterprises seeking an ERP solution with a focus on real-time data processing and advanced analytics

Year of creation:

2015

SAP S/4HANA Cloud enables businesses to conduct real-time analytics and reporting directly on transactional data without needing separate data warehousing or batch processing. This integrated data processing approach means businesses can gain instant visibility into various areas like supply chain, finance, sales, and customer service. The system also supports advanced analytics capabilities, including predictive ones, which can help businesses forecast trends and make proactive decisions.

Year of creation:

2015

eCommerce Solutions

software development costs ecommerce

eCommerce software allows businesses to create websites to promote and sell their digital and physical products. Such platforms provide a way to integrate the online store into the business’s website and give users direct access to products and services. Many businesses will find existing eCommerce platforms, like Magento, OpenCart, Shopify, and WooCommerce satisfactory, but some companies require custom software solutions. Especially companies with unique architecture or complex requirements will benefit from the customizability and creative freedom of a custom eCommerce solution.

eCommerce websites built on one of the popular eCommerce CMS, such as Magento, OpenCart, Shopify, and WooCommerce, have development costs: from $20,000 to $70,000 and more. It all depends on the level of customization, needed integrations, etc.

Software development costs for a custom eCommerce system built from scratch: starting from $50,000 for a simple product, and up to hundreds of thousands of dollars for complex solutions, depending on the requirements.

If you’ve decided to work with a ready-to-go solution, WooCommerce consulting companies can help you determine the most cost-effective and efficient way. Running a discovery phase will help you to achieve your custom eCommerce goals, ensuring that your investment aligns perfectly with your business needs.

 

Examples of the Best eCommerce Solutions

1

Amazon

Best for: Buying and selling various products

Year of creation:

1994

Amazon started as an online bookstore and rapidly expanded to become one of the world’s largest eCommerce platforms. It offers a vast selection of products, including electronics, apparel, home essentials, and more. Amazon is also known for its customer service, fast shipping (especially with Amazon Prime), personalized recommendations, and easy search functionality.

Year of creation:

1994

2

eBay

Best for: Buying and selling a wide variety of new and used items

Year of creation:

1995

eBay is a global online marketplace that allows individuals and businesses to buy and sell a wide array of products. Known for its auction-style sales, it’s a popular destination for collectors and those looking for unique or hard-to-find items. eBay also offers “Buy It Now” options and features a robust system for buyer and seller feedback to ensure trust and reliability in transactions.

Year of creation:

1995

3

Sigma Beauty

Best for: Beauty enthusiasts seeking innovative makeup tools and products

Year of creation:

2009

Sigma Beauty is a beauty brand known for its wide range of quality makeup brushes. Their Shopify-based website showcases a beautiful and responsive design with easy-to-use navigation and product filters. The site integrates with social media platforms and offers personalized product recommendations.

Year of creation:

2009

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Supply Chain Management Solutions

Supply chain management (SCM) is a complex business process that involves many actors, such as suppliers, vendors, retailers, distributors, producers, and customers. The process starts with raw materials and follows them all the way until the end consumer purchases the final product. SCM software is created to optimize and automate supply chain management processes to enhance performance and eventually increase revenue.

SCM software development costs: can start from $100,000 to $300,000 on average, and more for more complex solutions.

 

Examples of the Best SCM Solutions

1

LeanDNA

Best for: Businesses aiming to reduce working capital

Year of creation:

2014

LeanDNA is a cloud-based platform providing actionable intelligence to enhance supply chain efficiency. The factory inventory management software offers pre-built supply chain analytics and best-practice operational strategies to optimize resource utilization and reduce excess inventory​.

Year of creation:

2014

2

Coupa

Best for: Streamlining procurement processes and enhancing spend management

Year of creation:

2006

Coupa Procurement is a cloud-based software designed to streamline procurement processes. It provides tools for contract and supplier oversight, inventory control, purchase orders, and requisitions. Key features include efficient payment management, compliance tracking, and e-invoicing capabilities. It’s part of the Coupa Business Spend Management suite, offering integrated solutions for procurement, supply chain, and finance.

Year of creation:

2006

3

Körber

Best for: Businesses looking for a customizable and process-based warehouse management system

Körber, formerly known as HighJump WMS, offers a warehouse management system adaptable to various business practices. It features a full HTML5 user interface for accessibility from any device. It integrates with ERP systems, materials handling equipment, and more, providing flexibility with on-premise or cloud deployment options​

SaaS products

SaaS (Solution as a Service) applications are gaining noticeably more attention in the past few years. SaaS-based apps can be used in exchange for a monthly or yearly fee and can be accessed from any device. Usually, these types of apps are hosted in the cloud and provide a great level of security and convenience for end-users. SaaS works for various businesses, and this diversity influences SaaS marketing in effectively targeting and addressing the specific needs of different industries. Thus, it is quite difficult to estimate the average development costs.

SaaS software development costs: from $25,000 to $100,000, and even more for complex SaaS products.

 

Examples of the Best SaaS Solutions

1

Tableau

Best for: Advanced analytics and data exploration

Year of creation:

2003

Tableau is a well-known business intelligence platform that simplifies complex data analysis. It’s known for its user-friendly interface and ability to generate customized reports and visualizations. Tableau allows users to share and collaborate on data analytics and integrates with many applications, making it a preferred choice for businesses seeking insights from their data​.

Year of creation:

2003

2

Wrike

Best for: Comprehensive project management and collaboration

Year of creation:

2006

Wrike is a versatile project management tool that includes features like task management, Gantt charts, customizable workflows, and integration with various apps like Excel and Salesforce. It’s suitable for a range of business sizes and offers tailored solutions for specific teams, including marketing and enterprise-level needs​.

Year of creation:

2006

3

HotJar

Best for: Analyzing and improving website user experience and conversion rates

Year of creation:

2014

HotJar is a leading tool for conversion rate optimization. It provides insights into how users interact with a website through heatmaps, visitor recordings, conversion funnel reports, and form analysis. This data helps businesses understand user behavior and make informed decisions to improve site performance and UX.

Year of creation:

2014

Costs to develop an analog to a famous app

Let’s take a look at concrete numbers based on cases of creating alternatives to the most successful mobile apps. Average software development costs of creating a popular app like Uber or Tinder.

Uber

$80,000 – $100,000

Tinder

$60,000 – $80,000

Tiktok

$80,000 – $100,000

Slack

$100,000 – $120,000

Zoom

$80,000 – $110,000

Booking

$150,000 – $300,000

Average Cost of Software Development
(by size)

The average software development costs also vary from small and medium businesses to large corporations. In short, we will split all the businesses into three categories: startups, SMEs, and large enterprises. Depending on the company’s size, you will require a corresponding number of features, certain scalability metrics, feature complexity, and other characteristics. Let’s perform a software development cost breakdown and see what you will pay for a small, medium, or large application.

 

Startups

Startups are companies that are just opening their business and launching products, and creating a custom solution right away could be very beneficial. Building a tailored solution that caters to the specific needs of your business and audience will help you avoid reputational losses. Off-the-shelf tools can fail to provide some essential services that your industry requires and repel clients right at the beginning. At the same time, even a small successful application will generate some user base and give the much-needed promotional boost to take your idea to the next level.

Basic app versions are usually called MVPs, Minimum Viable Products. As a startup, you can create a small app with only essential features in just 2 months or 800 hours (total for the whole team of PM, QA, Designer, Back-end, and Mobile developers). The price for such an app will vary depending on the location and the average rates in your region. Still, the software development costs would lie between $30,000 and $45,000.

 

SMEs

To take the business to the new level, SMEs could build a bespoke solution to automate daily tasks and streamline internal processes. On top of that, a growing business always requires scalable software development for small businesses to meet their needs without compromising security, speed, performance, and other important factors.

An average software development time estimation for a medium-sized app would be around 4-6 months or 2000 hours (total for the whole team, which usually consists of PM, QA, Designer, Back-end, and Mobile developers). If we apply the same average rates ($50 per hour) as in the example above, the average software development costs would be from $70,000 to $100,000.

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Large Enterprises

Big corporations usually perform millions of operations and employ thousands of people. For an internal application, such enterprises definitely require large custom tools to manage their daily tasks. Large corporations face higher security threats as they become a very enticing target for hackers. Custom-made solutions will be specifically tailored to protect your assets and data to ensure that no serious breaches occur. Such software solutions are required to be compliant with data protection laws like GDPR to guarantee smooth operations.

With the same rate of $50 per hour, large-scale apps take more than 6 months to develop and cost over $100,000 or even over $500,000.

Factors that Influence Software Development Costs

In this section, we will concentrate on the five most significant factors that influence the final software development pricing. We have already touched on the topic but focused on the custom software types and the company size. Although both these aspects impact the price tag, there are a few factors that shape the budget even more.

 

Software Complexity

You will not be surprised to hear that the costs of software development lie in direct correlation with app complexity. This aspect involves several matters, such as the number of features, the complexity of features, and the level of customization. Clearly, the more features you would like to add to your product, the higher the price tag gets. But what about complexity? How to calculate the cost to develop software based on complexity?

Let’s take a look at a simple example: for a signup, you can implement a basic email signup feature (20 hours) or add a social media integration that allows users to immediately sign up using their accounts (extra 20 hours). The latter will be more complex and thus more expensive, but it will also be better for the user experience. The number of features and complexity of the future app should be established after the market research during the discovery phase. Without knowing the market and target audience, establishing which features are important will be very difficult and unproductive.

software development costs discovery phase

 

Platforms

Basically, for a mobile solution, you have two options when it comes to platform choice: native and cross-platform. Without going too much into technical details, native app development delivers you one app for one platform (iOS or Android), whereas the cross-platform approach allows businesses to create an app for two platforms simultaneously, using one source code base.

The catch is that native app development is more expensive, as you will have to write two codebases. However, native apps demonstrate higher speed, better performance, and excellent UX.

The cross-platform development approach is noticeably cheaper. At the same time, the metrics like UX, performance, and page load usually suffer. There are a few tricks of developing cross-platform apps and also preserving high rates in performance and speed. Read about how to decrease the cost of software development with just a few tips.

If you would like to also create a web application, the choice of platform is less important as most web development languages like JavaScript or Python are platform-independent. In other words, you can create a web app that will work no matter what the system is – Windows, Linux, or macOS.

 

UI/UX Design

Although it may not sound like the most expensive item on the list, UI/UX design can be quite pricey. Especially nowadays, people have realized the potential of great UX and the wonders it can do for your app. Poor UX design is the reason for frequent app abandonment and low engagement.

UI/UX design incorporates everything from buttons, colors, icons, etc., as well as the navigation itself and how easy and pleasant it is to use the application. Nowadays, businesses also strive to be inclusive and make their products accessible for visually and hearing-impaired individuals. The intensity and complexity of UI elements and your designer’s rate drastically affect the software development costs.

 

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Back-End Infrastructure And Connected APIs

Besides the frontend, which entails UI/UX design, you have to take care of the backend for the application. The bigger the app, the more complex processes will be required to operate the functions. For example, behind Uber’s easy-to-use interface and clear navigation, you will discover myriads of hidden processes that connect users to drivers and admins, load and update maps, track the delivery, and send notifications.

Moreover, data protection has become a crucial part of every business. You have to think about data privacy compliance throughout the entire software development process, and ensure that both your and the user data will be safe after the app launch. The challenge to keep compliance and regulatory functions in-house is bigger than ever with regulations being updated on the market almost every day.

For example, are you aware of the CCPA vs CPRA difference? Do you know what’s new in the GDPR regulations and that you have to be GDPR compliant if you have customers in the EU market? If you wish to stay on top of the ever-changing regulations and avoid costly fees and enormous penalties that can break your business, you need a data privacy software system to handle this for you.

Finally, you may need to integrate with other systems to provide your services. This will require purchasing APIs or building custom ones in some cases. In other words, if you build an app that needs a large number of processes and third-party integrations, your backend development costs will rise.

 

Hiring model and team location/composition

The final and vital aspect of software development cost estimation refers to HR processes. Firstly, your bill will change depending on the team composition, hiring model, and the location of the development company. In this part of the article, we will explore how and why these aspects influence the software development budget and try to find ways to decrease the costs.

 

Team composition

A standard software development team for web solutions usually includes frontend and backend developers, for mobile – backend and mobile app developers who write code, and a Quality Assurance (QA) engineer who runs tests. Besides that, development teams employ a UI/UX designer to create user interface elements and make the app aesthetically appealing and easy to use. On top of that, there is a DevOps engineer who takes care of the CI/CD pipeline, a Product Manager who makes sure the product requirements are in place, and a Project Manager who manages both the team and the processes.

If you are building a small application on a tight budget, you will not require a large team of coders and managers. The complexity and scale of the project identify the budget.

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Hiring model

software development costs models of cooperation

We will describe the three most common hiring models that are prevalent in the tech market. You can employ in-house workers, hire freelancers, or outsource your project to a third-party vendor, choosing the best BPO company. Before you can estimate software development costs, familiarize yourself with different models and choose the one that suits your business.

Freelance software developer rates are usually lower than in-house employee’s salary, but the quality of the project might suffer. On the other hand, freelancing and outsourcing are great for short-term projects, and the in-house model only works for long-term collaborations. What are the benefits and drawbacks of each model?

In-house
Freelance
Outsourcing

Costs

Expensive: includes taxes, benefits, hiring costs, office equipment, etc.

Affordable: you can find a freelancer on freelancing platforms like Toptal or Upwork.

Affordable: depending on the pricing model, you will avoid extra charges.

Contract duration

Long-term: in-house workers are usually hired for the long term.

Short-term: freelancers are hired per project.

Both: you can outsource a small task for the short term or hire a dedicated team for a long-term project.

Quality

Good: HR will make sure to vet the candidates and find you the best worker.

Poor: some freelancers may not be very reliable.

Good: an outsourcing company will be contractually obligated to deliver.

Communication

Great: you will communicate via corporate channels.

Poor: as the worker is not a part of your team, a few misunderstandings might arise.

Good: you will be assigned an account manager to handle communication about your project.

Dedication

Great: your in-house employee will be dedicated to performing well.

Poor: short-term freelancers might lack the motivation to perform their best.

Good: reliable outsourcing companies are fully dedicated to your project.

 

Location

The software development costs are also contingent on the location of the development company. If you decide to outsource, you may manage to lower your software development prices by a large percentage. Take a look at the hourly custom software development rates across different countries:

01

Eastern Europe

$35-60
02

Asia

$25-40
03

US

$80-100
04

Western Europe

$60-80

“Hidden” Costs

Now, we’ve covered most of the aspects that determine the budget of your software development. Still, in this part, we want to mention some factors that are less obvious but can significantly influence the final cost. What are those?

01

Security

With thousands of daily cyberattacks, we all know that having at least basic-level security is essential. Yet, what is important is that several security features and additional software you will have to use for cyber defense will cost you money. And often, it is more than expected. So, make sure to estimate the potential security expenses for your product.
02

Maintenance

Unfortunately, you can’t just release your solution once and forget about it. Bugs, updates, compatibility, and integration of new features will be there, whether you like it or not. That’s why you have to ensure that you include the maintenance factor in your overall cost estimation.
03

Marketing

Of course, releasing a product without proper marketing is useless. And the thing is that you will have to care about everything, from social media and PPC to link-building and PR. Yet, you can make it more cost-efficient by outsourcing some services, using free software versions, and looking for SEO agencies where, for instance, the price of backlinks includes content writing. It doesn’t seem like a game-changer, but it can have a great compound effect. Outsourcing brings a lot of benefits to your company. For example, off-page link-builders enhance online presence and boost product visibility for different businesses by expertly securing high-quality backlinks, driving targeted traffic, and improving search engine rankings.

Software development cost estimation at DOIT Software

DOIT Software is a custom software development company with years of experience and a rich portfolio of successful cases. We believe our extensive knowledge of the development process can help you get an accurate estimate of the software development cost for your project. However, before calculating the possible costs of development, you need to do some homework.

Firstly, describe your idea in detail and the problem your app is going to solve. Based on that, prepare a list of essential and non-functional features you would like to implement. Add a few examples of existing solutions and specify your unique value. Finally, provide technical specifications, design ideas, and some wireframes. To get an accurate estimate for your idea, contact the DOIT Software team.

 

The process of estimation

software development costs with doit software

Our team always strives to optimize the workflow and make the communication with clients smooth and friction-free. This is why we have developed 4 steps to a quick and accurate estimation of custom software development costs.

01

Consultation Call

The first communication we have with our clients is a consultation call where we introduce each other and learn the basic information about the project. If the client decides to move further and asks for a software development quotation, we plan another call, a videocall, and a meeting to gather more details.
02

Details Description

The second step is the meeting where we ask for more details which are necessary for estimating the software development cost. As mentioned above, there is no simple answer to the question of how much does software development cost. We will need to hear your app idea, including a full list of features, technical specifications, personal preferences, planned release date, etc.
03

Quote Preparation

Based on the information we receive from our client, we make the first software costing estimation. There are a few types of software development cost calculator techniques that we can use. We will talk about the different types of estimations later in this section.
04

Offer

Finally, we get back to you with an estimation of software development costs, and also some improvement tips to help you make the best product using the given resources.

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Software requirements specification

Another essential part of the software development and product design cost estimate is creating a software requirements specification. Software requirements specification (SRS) is a document that contains all the technical information relevant to the project, including product scope, target audience, user needs, functional, non-functional, and system requirements. SRS is a long and detailed document that outlines the framework of the entire software development project.

 

Methods of Estimations

There are a few methods of custom software development cost estimation that we use at DOIT Software.

01

Analogy estimation

As we have ​​an extensive portfolio of cases, we can apply the same cost projections when we see a similar project. Some changes will have to be made, but if the projects are similar enough, this type of estimation is the most accurate and the quickest one.
02

Ballpark estimation

Ballpark is a rough estimation of digital product development costs and answers the question of whether a company can financially build this project. It is usually conducted after the first meeting or call to give a client a rough number before going through with a detailed estimate. You should not start a project with a ballpark estimate and it’s best to receive a detailed one before jumping into the development process.
03

Detailed estimation

The key to smart project planning and producing a good detailed estimation is collecting enough information about the project. Having all the important data at our disposal helps us to get the idea about the app and increases the chances for developing an accurately detailed estimate. After listing all the features, creating mockups, and prioritizing features, we can deliver a precise product development cost estimation with two scenarios: realistic and optimistic outcomes. The optimistic variant implies that everything goes smoothly and no huge obstacles occur during the app development process, whereas the realistic approach takes common risks into account.

Estimation Template

There are some software development cost estimation examples that you can find online. However, with the following steps, you can create a template by yourself:

  • Split your entire project into several big phases: design, development, testing, etc.
  • Divide the stages into smaller and more manageable phases.
  • Estimate the duration of each subphase.
  • Identify the scope of HR resources you will require for each phase (developers, testers, project managers, etc.)
  • Establish the software development hourly rates (developer cost, tester rates, etc.)
  • Include the fixed costs, such as business or project management software costs, office equipment, training, etc.
  • Add up the tasks and calculate the cost of software development.

Conclusion

The cost of software engineering is hard to grasp as projects can be quite big and overwhelming. However, without a good estimate, you are bound to overspend and run out of resources. Luckily, there are tech companies that can help you get through this challenging phase and calculate the software development costs for you. Contact DOIT Software and use our extensive knowledge and experience to create an accurate estimation of the development costs for your project.

Frequently Asked Questions

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How much does software development cost?

Depending on the project requirements, features, the location of the software development company, and other aspects, software development costs for a small app are from $30,000 to $45,000, for a medium-sized project from $70,000 to $100,000, and for a large-scale complex application, $100,000 and more.

How is the cost of software development calculated?

There are a few ways of calculating software development costing, but we can roughly divide them into two categories: ballpark and detailed. Ballpark is a rough estimation you receive to get an idea of how much the app development will cost, whereas a detailed estimate is what follows afterward and calculates the costs more scrupulously.

What are the hourly software development rates?

Software development cost per hour depends on the location of the vendor. Software engineering contract rates tend to be a little lower in Eastern Europe countries such as Ukraine ($35-60), and higher in Western Europe ($60-80) and the US ($80-100).

What are the software development cost factors?

The most significant factors of software development costs are the app complexity, the number of features, and the location of the software development company.

VITALY MAKHOV,
CEO @ DOIT SOFTWARE
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