Is Custom Software Development Worth the Cost for Your Business?

Posted by Rubens Perdomo on Apr 14, 2021 7:30:00 AM

In Software Development, Software

Every business has different needs. Sometimes, to meet these needs, a company decides to hire a software engineer or development team to produce a custom software solution just for them. In fact, Statista projected that, in 2021, global spending on enterprise software would reach $517 billion.

What is software development and how does it work? Are custom software development costs worth the payoff? What factors affect the cost of software dev? When would you really need a customized enterprise app or software platform, anyways?

What Is Custom Software Development?              

Custom software development is the act of creating a new piece of software (or modifying an existing one) to address a specific client or business need.

This is inherently different from the use of stock or ready-made software that is designed to be broadly applicable for a large audience regardless of their preferred operating systems, hardware, and software assets.

Think of it like buying a car from a dealership “as-is” versus putting in an order for a custom car. Both cars do the same thing—carrying you from point A to point B. However, the custom car has a lot of extra features specialized for your specific wants like a higher horsepower engine, better brakes, back up cameras, collision avoidance systems, and a paint job in whatever color you like.

The car at the dealership is ready-to-go right away as soon as you sign, but may not be entirely to your tastes or may lack a feature you wanted or needed. Meanwhile, the custom car has everything you want (and nothing you don’t), but may cost more and it will take time to build that customized car and deliver it to you.

How Does Custom Software Development Work?

Different custom software providers may work in different ways. Additionally, different clients or business processes might have different requirements and existing IT assets that the software needs to be designed around.

Because of these differences, there isn’t necessarily a “one-size-fits-all” process for custom software development—after all, it’s custom!

However, there are a few “broad strokes” steps in the custom software development life cycle that tend to remain largely consistent:

  1. The client realizes that their existing workflows are missing a critical component or resource that a new software solution could address.
  2. They reach out to a software developer (either an internal team member or an external managed service provider (MSP)).
  3. The developer/MSP collects information about the desired outcome, the client’s existing IT assets, and business process to create an estimate and timeline.
  4. The developer/MSP presents their estimate and software dev plan to the client for acceptance, rejection, or modification.
  5. The developer/MSP begins dev work on the software solution.
  6. Once a test build is complete, the software developer or MSP runs a simulation in a test production environment.
  7. After testing, revisions are made to the software. These two steps are repeated until a viable product is deemed ready to launch.
  8. The software developer engages in ongoing maintenance and upgrades to keep the software relevant and functional.

How Much Does Custom Software Development Cost?

One of the most common questions about custom software is: “How much does it cost?”

The answer is: “It depends.” Why? Because, there are a lot of variables that can affect software development costs.

Some software developers cite costs ranging from $50,000 to $450,000 for initial development—though some large-scale IT projects can be even more expensive than that.

What Factors Affect Software Dev Costs?

There are a ton of factors that affect the cost of building custom software, including:

  • The Complexity of the Software. Larger, more complex software programs like enterprise technology platforms that need integrations with dozens of existing legacy systems tend to be more difficult to develop—this can lead to added costs.
  • The “Size” of the Software. How many interface screens does the final software have? More screens mean more software dev work, which adds to the cost of the software.
  • Custom Design Elements. The design of the user interface (UI) can have an impact on the user experience. However, custom UI elements may require the attention of a creative design specialist—which adds to software development costs.
  • Data Migration. Is the custom software replacing some existing system? Migrating data from a legacy system to a new custom software adds additional complexity to the process, which can add to the cost. Additionally, migrating data from multiple sources can be difficult—especially if different sources have different data filing systems or architectures.
  • Whether the Software Is Completely from Scratch. Sometimes, instead of building an entirely new software from scratch, a software developer might simply take an existing software and modify it a bit to meet a customer’s needs. This can help to reduce costs greatly for a custom software.

Pros and Cons of Custom Software Development

So, what are the pros of hiring a software engineer or MSP team to build a custom piece of software vs simply using an “out-of-the-box” software solution?

Pros of Making a Custom Software

  • It will be optimized for your specific business processes and technologies;
  • It’s proprietary to your company—making it an exclusive benefit of working with you;
  • It will be more reliable than an out-of-the-box solution since it was built with your IT assets and systems in mind;
  • It can be made more secure than standard out-of-the-box solutions;
  • It can be easier to use than a non-customized software;
  • If built and maintained by an internal software dev team, there is no need to worry about support for the software ending.

Cons of Custom Software Development

  • It can be extremely expensive to build and maintain a custom software;
  • Custom software dev can have long lead times—especially if work for the project is under-scoped and requires more dev work than expected.
  • New integrations will need to be made if new software is introduced later. Compare this to pre-made software platforms that may have or add new integrations without the need to pay for additional development.
  • If there isn’t sufficient “stress testing” of the custom software, there may be unexpected vulnerabilities that a more established “out-of-the-box” solution might not have.

Who Needs Custom Software Dev?

While every business may have unique needs, not every company actually needs a custom software solution. As time goes on and more new software platforms and solutions emerge, it becomes easier to find an existing software solution that will meet your most pressing needs.

However, custom software development services can be worthwhile for certain organizations. You might want to hire a custom software development engineer or team if you:

  • Have a legacy system that isn’t compatible with existing solutions and you need to make a custom application programming interface (API) or an entire platform to make it integrate with modern IT solutions.
  • Are in need of extremely strong security and need a solution that meets strict standards like high-level CMMC certification or NIST 800-171 requirements.
  • Know for a certainty that existing solutions have a missing component that would be crucial for one or more of your most important business workflows.
  • Need to ensure the scalability of your software platform and existing solutions don’t meet your needs.
  • Have the time, budget, and resources to dedicate towards custom development and maintenance of a new, proprietary software solution.

If time is of the essence, the ROI for custom software dev wouldn’t be in your favor, or you simply don’t have the budget for building and maintaining your own software from scratch, you may be better off with a ready-made software solution that’s “good enough.”

Do you need help and advice with building a custom piece of software (or finding and adapting an existing software solution for your business)? Reach out to the Systems X team to get started!

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