Guide
How much does custom software cost? What actually drives the price
Anyone who names a price before asking how your business works is guessing. The cost of custom software is mostly the time it takes to build what your workflow needs, so the useful question is what decides that time. Here is what does, and how to keep it under control.
Why an honest quote starts with questions
Two businesses can both ask for “an order management system” and need very different things. One takes orders by phone and prints an invoice. The other takes orders on WhatsApp, prices them from a catalogue with its own rules, checks stock, tracks production and dispatches in part-loads. The words are the same; the work is not.
That is why a serious vendor asks about your process before naming a figure. A quote given without those questions is either padded to cover what nobody asked, or low now and made up later through change requests.
What the price is made of
Most of the cost comes from a handful of things. The more of them a project has, and the more exceptions each carries, the more it costs.
- The number of workflows and screens, and how many steps each one has
- Rules and exceptions, especially the ones nobody has written down
- Roles and permissions: who may see, change and approve what
- Integrations with the ERP, accounting software, devices or messaging you already use
- Moving existing data out of spreadsheets or an old system, and cleaning it on the way
- The documents and reports the system must produce
- The languages the interface must support
- Where it runs, how it is backed up and how it is secured
How projects are usually priced
A fixed price suits a phase whose scope can be written down in detail. You know the figure in advance; the vendor carries the risk of underestimating, and prices that risk in.
Time and materials suits work that will be discovered along the way. You pay for the time actually spent, which is fair when the scope is genuinely uncertain, provided you see progress often.
Many projects combine the two: a fixed-price first phase that proves the core workflow, then further phases priced once everyone knows more. Whatever the model, ask for the running costs as well: hosting, support and the price of changes after go-live.
The costs that surprise people later
The build is rarely the whole bill. Ask about these before you sign.
- Maintenance, updates and support after go-live
- Hosting, backups and monitoring
- Changes when your own process changes
- Your team’s time for workshops, testing and training
- Lock-in: who owns the code and the data, and how you would move to someone else
How to spend less without cutting corners
Start with the one workflow that costs you the most time or causes the most mistakes, and get it working in daily use before adding the next. Buy products for the parts of the business that are ordinary, and build only the part that is yours. Connect to the systems you already run instead of replacing them.
Above all, write the rules down before the build starts. Settling how your business really handles its exceptions is the cheapest work in the whole project, and skipping it is the most expensive.
Questions
Common questions
Can you give us a rough figure without a meeting?
Not an honest one: the same request can mean a few screens or a system the whole company runs on. Every consultation call is free. After it you get a written proposal with the scope, the approach and what it will take.
Is a fixed price safer for us?
Only when the scope can be written down precisely. When it cannot, a fixed price either carries a large margin for risk or leads to change requests. A fixed first phase followed by separately priced phases often gives you certainty without the padding.
Is custom software always more expensive than a product?
Up front, usually. Over a few years, not necessarily: a product that does not fit costs money every day in workarounds, double entry and features you pay for and never use. Compare the two over the same number of years, including your team’s time.
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