Software Development Costs
Estimates, Key Cost Factors, Cost-Cutting Measures
With the background of 34 years in software development and 3,600+ successful IT projects, ScienceSoft is ready to provide the cost estimates for your project and take on the implementation.
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Software Development Costs: The Essence
Software development costs for a medium/large application may range from $50,000 to $1,000,000. The total amount mainly depends on the number and complexity of software features and its design patterns. Also, such factors as the type of development (custom, low-code, or platform-based) and the team involved (their roles, seniority, and location) play an important role.
Key Cost Components of Software Development Projects
01.
Requirements engineering, UX design, and project planning
During this stage, the project team:
- Analyzes the short and long-term company needs, existing processes and software.
- Gathers functional requirements and plans software features.
- Prepares UX design, which describes how users will interact with the system.
- Creates the project roadmap, makes resource and budget estimates.
- Assesses potential project constraints and risks.
To reduce project planning costs:
- Make sure that you entrust requirements elicitation to experts. High-quality requirements are a solid foundation for the project’s success, while incomplete, inaccurate, or ambiguous requirements can result in process-blocking debates or even the solution redevelopment.
- Ensure sufficient involvement of stakeholders and end users to better understand their needs and expectations. Disregard of their feedback at the earliest stages may result in the need to change requirements in the middle of development, and that would negatively affect the project costs and speed.
- Involve a business analyst with real experience in your specific industry. Their knowledge of industry trends, challenges, and recent developments as well as the ability to speak the same language with the stakeholders are a game-changer at this stage.
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02.
Architecture and UI design
In the design phase, the team transforms the requirements specification into a structure that can be implemented using a specific tech stack.
We can divide design into two areas:
- Technical design or software architecture design, which describes the software layers and modules, integrations among them, data structures used by different modules, and the required algorithms.
- UI design, which describes what the software end users see.
To reduce architecture and UI design costs:
- Explore the potential reusability of your legacy software. Often, we see that it is more cost-efficient and less risky to use some parts of our client's legacy enterprise systems than to develop and implement new software modules and integrate them with other enterprise systems.
- If you can take a modular approach to software development and rollout, do it. You will be able to launch new functionality faster and cause far less disruption to your everyday processes. It will also be easier to evolve the software consisting of loosely-coupled modules.
- Use ready-to-go UI templates unless a unique interface is your competitive advantage.
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03.
Software coding
Back-end developers write server-side code and APIs and conduct unit tests. Front-end developers turn static user interface mockups provided by UI designers into fully functional GUIs.
To reduce software development costs:
- Establish development and delivery automation environments (CI/CD, container orchestration, etc.). A professionally implemented CI/CD process helps integrate, test, and deploy new software functionality within 2-3 hours and reduces development costs by up to 78%.
- Consider low-code development. This approach helps make software development process up to 4 times cheaper and 10 times faster. A low-code application platform (LCAP) is currently the most popular low-code development technology. LCAPs (e.g., Microsoft Power Apps, OutSystems, Mendix) provide visual drag-and-drop modules that simplify and streamline building new apps.
- Use ready-to-use cloud services for storage, event processing, integration, data management and analytics, ML, monitoring, and more.
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04.
Quality assurance
The team checks if the software meets the specified functional and non-functional requirements and reports on the revealed defects, if any. Although we list QA as a separate stage here, it often runs along with the development, and the most effective QA runs throughout the SDLC: from requirements gathering to software maintenance.
To reduce QA and testing costs:
- Consider test automation. If it’s feasible, it can reduce testing cost and time by 20%.
- Shift QA left as much as possible. The cost of fixing defects is much higher than the cost of preventing them.
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05.
Software deployment
At this stage, the team makes software available for use. This may include installation, customization, user acceptance testing, creating user guidelines, and user training.
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06.
Software support and maintenance
Once the software is launched, it will require routine maintenance from either a dedicated support team or the original developers. This includes fixing bugs that surface after the software gets delivered to the end users, handling the changing requirements, optimizing the software and its infrastructure for better performance, scalability, cost-efficiency, closing security gaps (if any), and more.
To reduce software costs at the maintenance stage:
- Continuously identify the smallest resources needed and terminate the unused capacity.
- Track the unused services and terminate them if they’re not needed any more.
- Consider your cloud provider’s pricing models: maybe your app satisfies the requirements that would allow using cloud resources at a significant discount. E.g., with Reserved Instances from Azure or AWS, you can have cloud fees reduced by 72-75% if your demand for computing resources is unlikely to decrease within the commitment period.
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Key Cost Factors
Based on ScienceSoft’s experience in software development, we have defined the major factors that may influence a project’s cost:
App-related factors
- Application type (web, mobile, desktop).
- The number of platforms and OS versions supported (for mobile apps).
- The number and complexity of application features.
- The number of business functions covered (finance, SCM, production, HR, CRM, etc.).
- The number of business processes covered (e.g., for sales and marketing: email marketing, lead nurturing, ad campaign planning and analysis, etc.).
- Software performance, availability, security, latency, and scalability requirements.
- The number of users and user roles.
- The complexity of the application logic and architecture (the number of tiers, the number of modules, on-premises/hybrid/cloud-native/cloud-only, etc.).
- The number and complexity of integrations with other software (one-way/two-way integration/a shared database; a custom integration solution or a ready-built ESB).
- Advanced techs used (machine learning capabilities, AR/VR, etc.).
- The need to migrate data from legacy software.
- Regulatory compliance requirements (PCI DSS, HIPAA, GDPR, GLBA, etc.).
- The uniqueness and complexity of UI design.
Development-related factors
- The team involved (their roles, number and seniority).
- The approach to development, e.g., writing custom code from scratch, using low-code development platforms, using ready-built products to cover some parts of functionality.
- The sourcing model.
- The location of the outsourcing vendor (if any).
Sourcing Models for Software Development Projects
Sample Software Development Project Costs
As a project requires a team consisting of various roles whose hourly rates may differ, we share the ballpark estimations for different types of apps:
~$250,000
An ecommerce portal for the mid-market (platform licenses and content costs are not included).
~$250,000–$400,000
Inventory software for a large enterprise.
~$200,000–$400,000
Operations management software of average complexity.
~$800,000–$4M
Big data solution with AI and ML.
~$300,000
Digital process automation solution.
~$200,000–$400,000
Automated accounting solution of average complexity.
$30,000–$70,000
A native mobile app of medium complexity (field service, booking and ticketing apps, mCommerce).
$150,000+
A mobile banking app / mobile telehealth app.
*The estimates provided are not ScienceSoft's official pricing/rates for the software development projects. We calculate the cost of each project individually, based on our customers' specific situations and needs.
How to Start Getting Value from Your Software Sooner
Go for an MVP (minimal viable product)
At ScienceSoft, we often start with identifying and delivering a basic set of features which meets the key needs of end users (=MVP). Usually, an MVP can be ready in 3–6 months. So, you can start selling the new software or enjoy streamlined business process in a very short time. After an MVP is launched, you can continue evolving it, gradually adding more features and addressing user feedback.
Ensure good user trainings and guidelines
With proper trainings and guidelines, your clients, employees, or partners will onboard quicker, engage with the software more actively, and use the maximum amount of its benefits.
About ScienceSoft
ScienceSoft is a US-headquartered provider of software development services with offices in Europe and the Middle East. Our pool of 750+ IT professionals includes PMs, BAs, data scientists, security, QA, and DevOps engineers. We build reliable and efficient web, mobile, and desktop applications, B2C/B2B portals, large-scale enterprise applications and SaaS products, BI solutions, big data and IoT applications. The quality of the delivered services and the security of the customers’ data are backed up by ISO 9001 and ISO 27001 certifications.