Man holding piles of money in his hands and mouth, looking over his shoulder as though someone will take it

Let’s face it. Custom software is expensive.

(We’re sure you’re very surprised to hear this.)

But why is it so expensive? And more importantly, is it actually worth it?
If you manage an SMB with ever-growing technical needs, we’re sure you’ve tossed around the idea of hiring a software development team to create custom software for your company.

And before you question the relevance of our thoughts on this topic, (as Steele Consulting is in the business of software development), rest assured that we’re writing this blog post to give you the why behind the cost of custom software, along with our thoughts on when it’s the right fit for your company.

The reality is, sometimes custom software is exactly what your business needs, and sometimes it’s not!

So, if you’re considering this substantial investment, here’s when and why the cost of custom software is worth it:

Benefits of Custom Software

Before we talk about the factors behind the cost of custom software, let’s look at why companies even consider it in the first place.

Man in blue with his arms crossed thinking and looking upWhat’s the deal with custom software?

The primary reason for building custom software is so that your operational needs are met in one custom piece of tech. In other words, if the pre-made software options on the market don’t have the features you need (or have many features you don’t need), and your business operations are being hampered because of it, it’s probably time to look into custom software.

Who needs custom software?

Growing SMBs, large companies and companies with complicated operations are the primary users of custom software development. Why? Because complex operations take complex software to operate efficiently. Even if a large company has a relatively “simple” operational structure at its core, the more people, departments, and factors added to the mix means the more interconnected your operational needs to become.

In short, custom software is an up-front investment that is supposed to make your life — and the lives of your company team members — so much easier. It’s created to streamline organizational efficiency and smooth out your operational processes.

Cost Factors for Custom Software

Now that you’re enamored with the idea of custom software, here are the four top factors that add to the high cost of custom software.

How can I lower the cost?

Before we dive into these factors, it’s important to note that while some of them are unchanging, some can be mitigated based on the type of software you want to create and the company you hire to develop your software.

Building blocks flipping to spell “Cost down

Some software development companies are more experienced in creating software for a particular industry or sector, and that’s an important asset that can significantly reduce the cost of custom software for your company. When looking for companies to create your software masterpiece, ask about their past projects with businesses related to yours to get a sense of their experience level.

Tech Team

The No. 1 cost behind custom software? The people that are making it for you. Maybe it doesn’t take an army, but it does take a dedicated team of skilled professionals to build the custom software your company needs.

Tech Turnover

Not only does it take a team, but companies that have high turnover rates (and therefore disruption in their skilled teams) incur higher project costs. The cost of recruiting, training, and getting a software developer up to speed (even if they’re an experienced developer but new to your team), can easily be over $40,000 and can take up to an extra six months.

(So, that’s not fun.)

Unfortunately, the tech industry has the highest turnover rate of any industry. But here’s the good news: That doesn’t mean that every tech company’s turnover rate is equal!

When it comes to hiring a software development company, picking a company with a lower tech turnover rate can reduce the cost of custom software significantly.

Client/Developer Partnership

Secondly, another factor in the cost of custom software is found in what we call technical debt — i.e. the cost of rework within your project. This is a factor where you, as a client, have the power to significantly reduce your software development costs!

Now, the best way to mitigate reworking costs is to have consistent, clear communication with your software developer, and communication is a two-way street. If you’re not confident in a development company’s ability to speak to you clearly from the get-go, communication throughout the project may be even harder.

Additionally, if you are open to consistent communication with your software developer, you can provide valuable feedback as it’s needed in order to ensure your developers are creating the masterpiece you’re envisioning!

Development Process

Another significant factor that can drive up the cost of custom software is the development process the company you hire chooses to take.
When it comes to efficient software development, you want to look for a company that takes an “agile” approach instead of a “waterfall.”

The waterfall approach is what most people think software development is. The waterfall approach has a linear timeline and focuses on completing the bulk of the website development up-front before having a client step in to provide feedback. Sounds straightforward, right?

Here’s the problem:
As our Development Manager Tommy so wisely says,

“The way we interpret a feature, both in its functionality and purpose, is often different than what a client interprets.”

And since the waterfall approach relies on a software development company interpreting a client’s request 100% accurately with no additional feedback, it’s prone to lots and lots of rework.

That ultimately drives up the cost of custom software.

The agile approach is an iterative approach that delivers small updates on a consistent basis, typically every two weeks. In other words, the agile approach for software development is built around getting consistent client feedback on each and every step for your custom software!

And you guessed it! This consistent feedback cycle reduces your rework costs by a landslide.

Custom software isn’t cheap, but it is a worthwhile investment for many companies. If you’re interested in learning more about how Steele can meet your custom software needs, connect with our team today!