Software Development Cost: Understanding the Major Factors

Table Of Content

1. Know About the Software Development Cost Breakdown in Detail
2. Why You Need to Know Software Development Cost Factors?
3. Important Factors Involved in Software Development Cost
3.1 Project Complexity
3.2 Targeted Deadline
3.3 Base Platforms
3.4 Type of Software Application
3.5 Geographic Location
3.6 Hiring Model
4. Final Words
5. Frequently Asked Questions (FAQs)

Know About the Software Development Cost Breakdown in Detail


Understanding the pricing factors of a software development project is very important. It allows businesses to know the exact reasons why their projects demand high or low level pricing. Without having such understanding, businesses are just going into the process with a blind vision. The software development cost can vary in different circumstances, hence knowing about those reasons is considered pretty important for businesses.

Unfortunately, many companies do not understand the cost factors that are involved in a software project. They anticipate that the pricing of any software is quoted without any calculation. This is certainly a wrong concept that needs to have a definite correction. The professional software development companies never quote pricing without giving proper estimation of everything. This includes documented information of different stuff such as resources required, project deadline, paid themes/plugins estimates and more others.

Combining the information of all these things, a definite costing structure comes to the front. It gives a brief overview of the overall software development cost, allowing stakeholders to understand everything precisely. If any company does not offer the project quotation to their clients, then they are not considered trustworthy. It is advised to not take software development services from these agencies, as they do not prefer to work honestly with the clients.

In this article, we will discuss the topic of software development cost in detail. We will enlist some factors that are termed important for building the cost estimation of software projects. However, before going into those details, let us first understand why understanding software development cost is important for businesses.

Why You Need to Know Software Development Cost Factors?

Software development cost

Knowing about the cost factor of interested products/services seems important to every person. This is not just limited to software projects, but for everything that is demanded heavily in the market. It could also be considered a natural instinct of humans to inquire about the pricing at first place. The factor of trust also involves here because not everyone states the right thing until he or she is really honest by heart.

We have seen many cases in which cost of software projects are wrongly quoted to the clients. This generally happens when the clients are non-technical and have no knowledge about the pricing factors of software development. Their technical knowledge is generally weak which doesn’t allow them to understand the things that can take the project pricing higher in contrast to its original value.

To avoid getting tricked by such claims, it is recommended to know the cost factors that are involved in software development. This way, you will not remain dependent on the quotes given by other party. Similarly, by knowing the actual cost factors, you can point out the areas where extra charges have been included. This will give you an advantage to find out the wrong demands, as well as the correct quotations that could be finalized for the given software development project.

Important Factors Involved in Software Development Cost

The quotation of a software project is made after looking into different factors. This is at least the procedure of professional companies that are looking to quote project pricing honestly to their clients. It lies on their reputation as well, hence they cannot negate from this practice under any circumstances.

However, some companies do not follow this practice as they tend to quote their own pricing without using any protocols. To avoid getting tricked by them, it is recommended to know about the cost factors that are involved in a software project. If you do not have much knowledge about them, take a look at the points defined below.

Project Complexity

Project complexity

The first thing that is very important in deciding the cost of a software project is the overall product complexity. This question is often raised at the first stage, so that both parties can understand each other precisely. It is also called requirement analysis that allows development teams to fully understand the objectives and goals of the project. It gives them an overview about the project, as how it should be executed and completed according to the given functional requirements.

If the project development looks complex to the developers, then they quote a higher price tag to the clients that is reasonable for it. The analysis of that cost depends on the developers, hence they need to be very smart while evaluating the complexity of the project. Generally, software projects like CRM, ecommerce stores and more demand higher pricing. The features included in those projects are bit advanced, which is what prompts developers to charge a little bit higher from the clients.

Targeted Deadline

It should be kept in mind that those projects that are assigned at tight deadlines always get a higher pricing tag. Whether it is a website or an android application, the deadline oriented projects are always assigned with a higher value. This also does not mean that anybody in the industry regardless of their experience can bid for those values. Generally, companies award these type of tight deadline projects to the renowned agencies that have prior experience in managing such closely set timeframe projects.

It is obvious fact that tight deadlines can only be managed by those software agencies that are well versed in handling such complex projects. They have liberty to designate multiple resources on a single project to meet the given deadlines. However, to do that, they charge a good amount of money that certainly looks reasonable to all. It can be also bargained depending on the timeline defined, as well as the external resources involved in the project.

Base Platforms

.NET framework

The platforms used in the software development also helps to decide the cost of the project. We all know that there are multiple types of languages and frameworks available around that could be used for development. They are basically selected on the basis of objectives and core software project requirements. Sometimes, clients also specify about the needed platforms at the start of the development. This helps to build a strong communication between both parties right from the word go.

Today, the development industry has been stacked up with different types of frameworks and platforms. These can be divided into two categories based on the nature of development i.e. frontend and backend development. Both of these categories have become a mainstay in the industry of software development. Their platforms are also different in which some are termed highly advanced. The specification of cost is also done on the basis of these platforms, hence their selection should always be done very smartly.

Type of Software Application

It is quite important to understand that not all software products are built using the same methodology. There are some key differences between every project that needs to be respected during the development. These dissimilarities basically allow applications to look unique and different from others. Meanwhile, the difference in their relevant industries can also be one of the causes. As a developer, you must need to look into this fact to properly evaluate the pricing as per the current standards.

For instance, the software development cost of a banking application would be much higher as compared to general retail website. The reasons is that banking applications are more complicated and have got multiple modules of development. These type of applications generally require scalable deadlines, hence their costing also depends on that. Similarly, the cost of an android app would be different to CRM platform. You can easily see the difference between them and anticipate why their development costs are different.

Geographic Location

Remote software teams

The geographic location of developers also play an important role in finalizing the cost of the software project. We have seen many examples in the market how big freelancers charge for their work. They basically take advantage of their remote locations to specify their development cost. However, the skills and  experience of them also matters a lot in this regard. They are not just blindly selected after looking at their country of residence. Instead, a proper analysis is done on their skills to precisely know the exact quality of their work and final budget required for it.

Generally, skilled freelancers having certifications in different areas charge a good sum of money. They ensure to offer perfection in the design which is certainly not an easy task. Sometimes, software outsourcing is also done, so that external teams can build and manage the projects smartly. Again, this scenario also requires businesses to be smart because they cannot just randomly outsource their projects to any new company. They need to look into things before finalizing them, especially when the projects are complicated.

Hiring Model

The hiring model also play an important role in specifying the cost of software development. You might have seen three different options of hiring on various freelancing sites i.e. hourly rate, fixed rate and dedicated team rate. All of these models are used by different businesses in the hiring of software developers. Some prefer to choose the fixed rate, while some go for the hourly option as it gives more flexibility to their budget management.

The third option, dedicated team, is normally preferred by big businesses that are looking to employ a whole team for their projects. Their strong financial capital allows them to hire expert .NET developers in the form of dedicated teams for particular days or even months. This way, their project management becomes centralized as they do not have to look for further resources to perform any other job. It has certainly proved to be very successful model, provided the dedicated teams hired for the job are also skillful.

Final Words

That takes us to the end of this article in which we have discussed about major factors that impact software development costs. Being a business owner, you must need to know about these factors before finalizing any budget for the development. A lot of time, people do not bother about these facts and tend to award their projects without doing any research of the pricing. It only creates difficulties for them when they are tricked with overpriced quotations that certainly looks very unreasonable.

Knowing these few points will help you to allocate the software development budget smartly. Meanwhile, if you are looking for a company that can lower down your software development cost while offering quality products as per the needed requirements, contact us today. We are well versed in developing different types of websites and software products that fits to the demands of the modern industry. Get in touch with us now to build a system that can help your business to accelerate rapidly in the market.

Frequently Asked Questions (FAQs)

How do you estimate a software development cost?
Software development cost is estimated on the basis of different factors. It includes overall project deadline, features, revisions, and more other things. Combining all of them, a final cost is calculated and discussed between both parties.
Is it cheaper to buy or build software?
The decision to buy or build software depends on a number of factors. Firstly, you have to look at the available resources, then you have to evaluate the total time required for the project completion. Based on these learning, you can decide whether to buy or build software.
How many hours does it take to build software?
Well, the total time required to build any software depends on the features needed in the project. If there are some sort of difficulties in working on them, then the hours can increase without any definite estimation.
What is the development cost of an android application?
The development cost of an android application can vary due to different factors. A normal android app can be developed under $1000-$5000, whereas a more advanced application can scale up to $10000 or even more.
What does mean by software development cost breakdown?
It is a term that helps us to know how the software development cost has been divided into different stages. Generally, the breakdown is documented to describe clients clearly about different pricing factors that are involved in the project.