Software Development Costs Explained

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Knowing how much software development can cost, and learning how to plan ahead can help you manage your budget and scale your development team with ease. Here's how.
Published on
July 20, 2023
Updated on
April 11, 2024

A successful software program or app can make or break the success of your business. Understanding software product development is only part of the task. Calculating software development costs is multifaceted and depends on your project's complexity, size, and business requirements during the development process.

According to the U.S. Bureau of Labor Statistics, software developers are in high demand now and in future projections. Because of this, accounting for software development costs often comes down to finding those in-demand tech professionals that will make your software development team successful. Labor costs can be the largest expenditure in your project’s budget.

Before putting together your rock-steady software development team, understand the factors that determine your software development costs for any software project. Find out more about how Revelo works, and let us help you hire the best talent to round out your team for a successful project.  

Average Cost of Software Development 

Average software development costs vary based on the size and complexity of the project. On average, you can expect to pay around $50,000 to as much as $250,000. The type of project is another deciding factor. For example, system configuration management software development costs can range from $100,000 to $300,000. You also must consider the size of your team and their salaries.

Key Factors Influencing Software Costs

Many factors go into calculating the cost of a software product. The size and type of the project, how difficult it is to create, and the number of people on the development team will all figure into the final software development price.

App Complexity Levels

The easier an app is to develop, the less it’ll cost. In contrast, apps with higher levels of complexity with various attributes and features will increase the development cost. This complexity is due to the following factors:

  • Language and framework
  • Features and functionality of the app
  • User interface, custom design, and other design elements
  • Level of supporting documentation
  • Added challenges involved, such as Software-as-a-Service (SaaS) challenges

The cost can be higher or lower depending on what your app needs and the maintenance it requires after deployment. An example of a simple app requires no backend processing and has a simple user interface with one or two goals in mind. A more complicated app involves a full technology stack, comprehensive backend processing, complicated algorithms, and an extensive user interface.

Project Type

Project complexity varies with project type and, in turn, project cost. Some project types may require a specific skill set. You may pay more for the development process if your project requires more user interaction, such as different user categories and profiles. When anticipating a software development project, consider the following project types:

The types of apps or services you require affect software development costs. If your project needs to be built from scratch, you’ll pay more than one that needs minor modifications or tweaks. If your project is SaaS, the SaaS software development costs can be higher than other project types because of the complexity involved.

Project Size

Simply put, projects are small, medium, or large. Small projects can be simple or complex and include modifying, tweaking, or releasing bug fixes to existing apps. Medium-sized projects can consist of small mobile applications or web interfaces, which also can range in complexity.

Large projects are typically more complicated than smaller projects, but they can still be simple. It all depends on the project’s main goal and functionalities. More complicated large projects may include integration, database components, and security features.

Big or small, projects can range in complexity level. Some people confuse the project’s size and complexity or substitute one for the other. But project size is different from project complexity. Big projects aren’t always complex, and small projects aren’t always simple.

Business Requirements

Just like no two apps are the same, no two businesses are the same. Every company will have its requirements and needs in the software development lifecycle. Include your business requirements in your software documentation outline. These are in addition to the project's functional requirements.

Your business requirements may include the following:

  • Current pain points and factors to address
  • Current and future project objectives
  • Resource needs
  • Delivery stages and milestones
  • Target audience requirements
  • Project constraints
  • Stakeholders
  • Potential risks
  • Software solution requirements
  • Anticipated return on investment

Each of these requirements will affect your total software costs. For example, the price will be higher if your software or app requires an extensive, interactive user interface.

Platform Used

Not everyone is on the same platform, which means you may require potential product modifications to accommodate multiple platforms. As you might imagine, building a viable product, app, or service that works on various platforms is more expensive, as you’ll need different versions of the same code. You might need to hire multiple developers with unique skill sets to work on the different versions.

If you decide to build software exclusive to one platform, you may miss out on potential customers, thus decreasing your return on investment. When creating an app, having versions for both Android and iOS will maximize your customer base.

You may consider building a cross-platform app to deploy across all platforms. But depending on your team's abilities, a cross-platform app isn’t always a solution.

Customization of UX/UI Design 

The user experience (UX) and the user interface (UI) are critical in the software development process and can range in complexity. Bad UX/UI designs can cause customers to lose interest in your product, so spend the time and money to perfect these areas for maximum customer satisfaction. 

UX/UI designs involve every graphic element on an interface, including fonts, buttons, icons, and colors. UX/UI also encompasses ease of use and accessibility for your users. Paying for UX/UI means that you’ll be paying for animations, artwork, testing, and redesign.

External Systems & APIs

Building your software to connect with external systems and application programming interfaces (APIs) is a smart move. Unfortunately, these systems often require extensive backend processing, which means higher costs. Customers won’t see external systems and APIs, but they will prove necessary. 

For example, features such as mapping and geolocation run external to the app but are there when the user needs them. Security, data encryption, and protection all run behind the scenes to the user but are critical to their confidence in your product. Consider these as costly-but-necessary requirements of your software development.  

Team Size & Salaries

It will come as no surprise that the size of your software development teams contributes to the overall cost of your project. A big team for a complex project will raise the project costs significantly.

Since every project is unique, the size of your team will vary from project to project. But every project has at least three role requirements: project manager, developer, and quality assurance tester. Each role may require its own team, but some individuals can fulfill multiple roles. Each team member's hourly rate or salary can vary wildly depending on experience and other factors.

Hire Software Developers With Revelo 

If you have a project in mind, it’s essential that you have the best, dedicated team to make your project a success. If you want to cut through all the noise and find the best team for the job, look no further than Revelo. At Revelo, we’ll introduce you to vetted tech talent and help you with every step of the hiring process. Contact us today to learn more about how we can help you build a custom software development team.

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