Introduction to The Issue:

How Much Does It Cost to Develop A Software Application?

Contact Person
Ivanna Gurmak, CMO, Artelogic
22 Feb 2017

It is not a sign of good manners to answer a question with a question, but be prepared to receive a plenty of questions in response once you have asked your software development company about the budget. And the question, how much you are ready to spend, should not confuse you as well. Be sure that is OK and means you deal with a professional team.

One of the questions every client sooner or later will ask a service provider is how much it costs to develop a web or a mobile application. Topping a list of subjects for discussion and sometimes being among the first ones, there is no exact immediate answer to it. Even the software development companies with ten years of experience are not ready to provide you with a budget at once. It is possible only with a thorough understanding of the whole situation.

Correctly drawn up requirements help define the expectations from both parties throughout the project flow and bring light to the time estimation and thus budgeting issue. At our previous material Requirements Elicitation. A Starting Point to Technically And Feasible Software Products you can read a few advises to take into consideration before you start a new project. In general, a price-wise technical solution means that the best suitable technologies and right efforts in the engineering phases are applied. Usually, this approach leads to a valuable finished product. And underestimating any of these components you risk the value of your technical solution.

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There is no magic formula that will uncover the numbers in your future bills, but once you have a technical specification, it becomes an easy math. As a rough guide, the price is formed based on the performed work according to the standard hourly rates. In other words, the resources, their hourly rates, estimated time of efforts form a total by a group of services.

You might wonder why the budget of one and the same query can vary from one to another service provider. And the gap can be sufficient. Does the most expensive mean the best? We all are the users of other services, and we probably know what can be if to go with the cheapest option. 

There are also two types of price models in software development field. The first one is time and materials contract type. It fits the best for medium and large projects as their requirements can be evolving. The second one is the contracts based on the fixed price. This type can be applied to small and medium projects. Their scopes are usually defined. When it comes to fixed price, you have to remember about all the risks connected with it in terms of long-term large projects. As statistics shows, it is difficult to estimate a scope longer than a few weeks.  And if a software development company does not apply a risks reserve properly, various scenarios can take place. More about this we’ll tell you in the next article. 

Summarizing all above mentioned:

The price depends on the project complexity.  

Keeping to a step-by-step approach can cost you more time and money, but will deliver expected results.

It costs more to work with a really experienced team of developers.

Following only cost-based decision is not trendy and reasonable.

Don't rely on pricing, but rely on an expertise.

Engineering applications is not the same as engineering real business solutions.

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