The Costs Involved When Working With A Software Development Company

Clock icon 2 years agoFolder icon Oleksandr Kravets

Technology is critical to businesses of all sizes in all sectors. No matter how good your idea is for a new service or product, you’re going to need to build a technology solution, unique to your business, to deliver to your present and/or future customers. It’s rare that a one-size-fits-all solution will work.

But developing bespoke software comes with a time and money cost, and small to medium sized businesses may feel that the cost prohibits them from developing the solutions they need.

This needn’t be true, thanks to software development outsourcing. Just like it says on the tin, contracting your software development out to freelance engineers is a way to reduce your costs while building the software you need.

Naturally, outsourcing comes with a cost too, but this needn’t be excessive. We go into details about the cost of software development in this post, so that you can build a better understanding of what working with a freelance development company will charge – and what you should receive for your money.

Software development cost breakdown

It’s impossible to quote a standard range of fees when it comes to outsourcing software development since each project will always be unique. That said, there are a few factors that will impact cost on nearly every project. They are:

  • The complexity of the task at hand (this is also known as scope)
  • How many developers are needed to build the software solution
  • The location of your contract software development team
  • Extras that might be needed, e.g. subscriptions for infrastructure cost, additional servers
  • Ongoing maintenance requirements
Factors that impact on software development fees

Additional factors may also affect custom software development rates. At Netfully, we’re transparent about the costs that need to be factored in to your software development budget.

Chief of these factors is size

By size, we mean both the size of the project you want delivered and the amount of team members that we’ll need to devote to your project to achieve the desired outcome.

As expected, the more human resources required, the more the cost will be.

We share a few tactics on how to contain your software development costs further on in the post.

How complex is your project?

Then, we need to look at the complexity of your project.

The complexity involved will mainly have to do with the coding and testing that is necessary to build your software solution or app. A lot goes into this.

Do you need to integrate your solution with other apps or systems? How will your customers pay? Do you need a solution that has multiple payment systems plugged into it? What about data migration and analytics? How much data will your users be creating and how much do you want/need to track? These are some of the questions we need to ask to understand how complex your project will be.

Think of your design

Adding a specific design look and feel to your software solution and app is entirely possible. From a marketing point of view, design will feed heavily into the branding of your product.

Naturally, design can add a significant fee to your software developments cost breakdown. Custom images, icons or fonts are more expensive than off the shelf resources. Depending on your own marketing strategy, it might be worthwhile to launch your product with all its functionality in place and prioritise custom design for a later stage in your product roadmap. But only you can make that call.

Also, remember that the design process is a two-way collaboration. Feedback and multiple iterations are part and parcel of custom design work.

Your budget

There’s no doubt that you have a budget in mind for what you can spend on software or app development. We welcome this.

At the same time, our role is to share what is and isn’t possible within your budget.

We manage clients’ expectations when we begin working together by explaining what features can be built with the budget at hand. If more features are required than the available budget will allow, there are two options: either more budget needs to be found and allocated, or a prioritisation exercise needs to take place whereby some features are pushed out to a later date.

As we like to build partnerships with our clients, we also invest time upfront discussing how we’ll work together if the client requires more hours or more developers to complete the build. Both clients and ourselves are protected this way, without any nasty surprises coming down the line that threaten to blow up budgets.

The benefits of software development outsourcing

While outsourcing software development has been a game-changer for startups and SME business owners, large companies and corporates are also taking advantage of the benefits that arise when working with a contract agency.

These benefits include:

  • Smaller cost – your expenses are reduced as you don’t need to pay for equipment or the supplies that in-house engineers and software developers need

  • Enhanced flexibility – outsourced software design agencies often provide additional services, e.g. design, that you don’t need to hire for

  • Great time management – contract agencies can meet strict deadlines by allocating additional skills and developers onto projects

  • Great partnerships – we are as invested in your success as you are and will work tirelessly to ensure your maximum efficiency

Spending wisely on your software development

It’s only right that you want to get as much bang for your software development budget buck as possible. And the good news is that there are various ways for you to allocate your resources wisely to ensure you get the best product possible.

  • Prevent silo mentality from taking hold – as the client, it’s hugely beneficial for you to ensure that your software development agency understand the larger purpose of why they’re creating the products they are. This helps us understand your goals – and helps us help you achieve them.
  • Speak to your existing and/or potential customers – have conversations with people who are already using your product or service, or may do so in the future, and listen to their feedback. You might need to filter some of the feedback but you’ll also gain a deeper understanding of what your customers want – and you can then build a product ideally suited to them.
  • Turn ideas into business cases – you can’t action every piece of feedback you receive, but how do you decide which ideas are a priority and which ones aren’t? The answer is to list them in a document and measure, as far as possible what it will cost to provide this feature against what its potential gain to the business might be. Then build your list of priorities.

How to reduce your software development costs

As mentioned already in the post, software development pricing is not a standard cost. However, there are ways you can reduce what you pay.

Firstly, by deciding to outsource you’re already working smartly with your software development budget. Make sure you get the best out of your agency by choosing a firm that has a history of delivery for clients.

Some development costs are fixed and some are variable

There are many different factors that come into play when you’re outsourcing your software development requirements. But so too are there ways to limit what you spend. Not all costs are fixed, and the tips below share how you can limit what you pay.

The need for documents

Create requirement documents of what you’re looking for. Use plain language to document what you need and ensure that the freelance software developers working on your project understand what your expectations are.

Follow the Agile Approach

Following the Agile Approach minimises the possibility of misunderstandings that can result in work needing to be done over.

The Agile Approach involves cooperating with all stakeholders at every part of the software development life cycle. At every point of completion, the developers will showcase the product to the client, invite feedback and then improve the product based on the client’s feedback. This way, any changes that are necessary are made through the process, and the risk of having to redo work at a later stage drops drastically.

Request automated tests

Manual testing takes time, and, as the old saying goes, time is money. They’ll be necessary at some points, but a large percentage of the software development build stage can be tested via automated tools. Not only will this save you money, but testing this way will also enhance the efficiency of your overall project.

Think carefully about what features you have to have

This suggestion rests on your own budget; if you have the money to spend on the “must haves” and the “nice to haves”, then go ahead. But, invariably, not every feature is going to be necessary, and eliminating the unnecessary ones reduces your costs and the time it takes to build your app or product.

Don’t forget about maintenance costs

Building your app or product is not the only place you’ll spend money on software development fees. There are maintenance fees to keep in mind to ensure that your customers stay happy with your business.

As we build partnerships with our clients, and seek to work together on a long-term basis, Netfully likes to provide, as far as possible, fixed costs for maintenance. We’ll discuss this aspect when we initially embark on a project with a client, but it’s always a good idea for a client to keep maintenance costs on their list of priorities too.

Working with an outsourced software development agency should be a positive experience for you. Not only will a reputable agency help you deliver your product at a reasonable budget, but they’ll become a big factor in your company’s success. Keeping up with technology today requires working hand-in-hand with an software development firm that delivers on cost, timelines and your goals.

If you’re interested in discussing what software development costs might be for your business, feel free to contact us. We’d be delighted to hear from you!