To boost productivity and revenue, small to large-scale organizations adopt highly advanced software. Most companies prefer to develop their digital solution rather than opting a third-party software, as it ensures to fulfill their business requirements and provide them better control over its functioning. Before initiating any software project, several aspects are analyzed, and a feasibility study is one of them.

Whenever a company wants to go for any technical modernization, the cost is the most vital element, which is focused more. Therefore, the project begins only after the budget is finalized, and it is assured that all the resources are covered under it, including the post-development maintenance and support.

Nowadays, feature-rich applications are integrated with Cloud infrastructure, Artificial Intelligence, Machine Learning, the Internet of Things, Blockchain, and much more. With this, the development team’s effort is increased, and it directly affects the expansion of the payable accounts.

It is hard to get a final statement of expenses by knowing the business demands. The cost of subscriptions to development platforms and access to improved technologies is changing dynamically. But, you can get an approximate price figure by looking at and studying over some of the primary constituents involved in the viability study.

Which Factors one must Analyze for Software Development Cost Estimation

You can find the proper expenditure of software projects by scrutinizing the vital components below. These are included in every calculation performed by a development company while generating the documents associated with cost estimation.

Type of Project

The first step in defining cost is understanding the project details and scope. Every enterprise does not require full-fledged software; sometimes, only a login page or a new user-friendly interface is required. Thus, it is crucial to precisely go through the requisites and discover whether a new application is required or cost can be saved by modernizing the current application.

In addition, details of devices and operating systems used by end-users are essential for deciding the platform and programming language for fabricating a scalable software solution. Creating a cross-platform application and picking different technology for multi-device compatibility will surely raise the budget bar.

You must recognize what type of software is required, a website, desktop solution, mobile application, or web app, as it will decide the tariff for working hours and resources to be utilized for your project. Moreover, you must research what type of software will be best suited as per your enterprise and user base.

The Complexity of Software Project

The smooth functioning of the software depends on the interaction between the front end and back end. Building a well-grounded base for any application is the primary pillar, assuring performance and Quality of Service. The complexity of software also rests on the number of customized APIs, widgets, and plugins required to craft it within schedule.

Furthermore, design requirements, adjoining of systems and networks in an application escalate the convolution, for which more assets, time, and budget are needed. Giving an appealing look with animations, gradients, and streaming videos intensifies the budget. Still, you can ensure a high return on investment with this, as it will retain your potential customers and enhance visitor conversion.

Moving to the backend, embedding cloud and third-party APIs is expensive, but its charges are entirely subject to the number of users, configured security mechanisms, servers, and resource utilization. Therefore, complexity relies on your necessities. You can effectively control this by going for a simple and attractive design and a streamlined backend, which you can slowly scale up with growing business.

Size of Team

Total members in a development team are hired as per the type, complexity, features, and timeline of the software project. QA Analysts, Project Manager, Developer, Designer, Tester, Cloud and Network architects, all are employed with different base pay. Somewhere in software development, the signing up of employees also depends upon the platform selected to build the application.

For Example, suppose you have selected custom .NET application development. In that case, a dedicated programmer is all you need, but if different technologies are picked out, then a more significant number of people are required with the appropriate skillset.

With more demands and a tight schedule, human resources is doubled along with hardware and software assets. Therefore, you must cross-verify a team member’s skills with the complexity of your project and try to create cases where a single person can fulfill more than one role. Such techniques are beneficial in small and medium projects, where developers can design interface, backend, and test it on their behalf. But, for large-scale projects, a single resource needs to concentrate on a dedicated portion to move precisely with the project plan.

Therefore, a few hired hands can save you money in small and medium scale projects, but it can vary as per your time to market and enterprise necessities.

Development Approach

Every software development company follows a diversified methodology to cover all your business needs and construct a powerful future-oriented application. Each approach consists of gathering information, design, development, testing, and software deployment.

But, agile is the most popular and preferred development mechanism, which works on executing small iterations for covering each business aspect. It aids in reviewing the progress after each iterative session and enables the clients to add modifications in between. You can highly benefit from this approach, but it is impossible to decide on a fixed budget to create your software, as new resources will be added, impacting the timeline to extend with every new necessity.

Moreover, several other development techniques are available, and you can easily select a suitable one by scrutinizing the complexity, type, and tech stack you will use. This can optimize the overall cost and save you some hundred grand.

Insourcing or Outsourcing

In-house team and joining forces with an IT company are two most appreciated ways, and both have their advantages and disadvantages. You have to select the most relevant option according to your organizational prerequisites. You can engage full-time employees on a salary basis and assign them to multiple ongoing projects in your enterprise. It will lead you to construct and maintain your multiple custom software affordably.

With an outsourcing approach, the burden can be reduced, and you can choose from engagement models offered by the other company. In addition, it helps to avail efficient services at a low cost and promises to roll out the solution before the deadline.

In addition to this, you can go for hybrid models, where NDA agreements are signed, and the project is divided among the in-house and outsourced teams. For Example, a partner company will create the solution, but your full-time employees will modernize and maintain it. It can cause a significant benefit in reducing the cost and conserving the standards.

What to do after Identifying Key Facets?

After listing all the essential information, such as whether you need to build a web app or a desktop app and its core functionalities, you must identify the most suitable platform to furnish it. Furthermore, all the professional human resources must be pinned down, and their wages should be documented before moving forward.

You can go for project management tools, such as Microsoft Project, to produce a work breakdown structure and Gantt Chart for better insight into the total requirement of assets, people, and finances. It can also keep up the momentum for completing upcoming milestones adequately. In addition, you can use this tool to calculate the overall time and cost needed to finalize and deploy the product in the market.

And, if you are going to collaborate with a third party, you can request an RFP and conduct a consultation session to aid yourself with a temporary expenditure structure and services concluded in it. Then, check with different vendors and assess which one offers the best custom software development economically.

Also, at this stage, where preserving capital and adapting a digital solution is involved, your decision-making assists you a lot. So keep an eye on the mentioned elements and explore the market to gain a high return on your investment in a short period. Besides this, always have a variable of +/- 10 – 15% of the overall budget, as new challenges can appear during development.


Estimating the cost of a custom software project is not so difficult, as most people assume it. First, you need to write down the vital information, as mentioned in this blog, and then you can quickly know the ballpark value of the budget you need.

Once the finances are calculated and fit your company accounts, you can effortlessly move forward to establish a brand across digital platforms. Always pick out a reliable partner, such as Positiwise, who holds you from the beginning and long-lasts with your organization.

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