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The Real Cost of Custom Software Development: Uncovering What’s Hidden


When you set out to create custom software, one of the biggest dangers lies in hidden costs – unexpected expenses that can upset your planned balance of budget, deadline, and features.

The key to keeping your project from getting mired in these pitfalls? In short, you need to recognize these traps before you set out, so you can avoid them once you’re on the road to a finished product. What, then, are some of the most common mistakes that organizations make when estimating the cost of custom software development projects? What kind of hidden costs may emerge?

Unique process, unique costs

The first important thing to remember is that software development is not analogous to physical manufacturing, or any other production process. Its methodology is unique, and when decision-makers plan a software project based, consciously or unconsciously, on the assumptions of another production methodology, it can mask a variety of key costs.

The need for coding, for example – active “fingers on keyboards” time – is obvious. But not everyone anticipates the necessity of management time and coordination if a software development team is carrying out the project. There are also up-front research costs that help ensure you’re pursuing the best possible software solution for your needs. In order for the development process to be effective, your team will need to collaborate closely with the development firm during the research stage, and you should not overlook the cost of this participation.

Likewise, there are costs associated with:

• User interface and design
• Testing the code
• Deploying the code
• Hosting a web application
• Bandwidth expenses

When planning your project and speaking with potential software development partners, it’s important to anticipate, discuss, and arrange for the full spectrum of needs specific to the software development process.

Avoiding hidden requirements

Even with the best planning, it’s impossible to completely avoid surprises. A major hidden cost of custom software development can be hidden requirements – new needs that don’t emerge until after you’ve started the project, and that could add anywhere from days to weeks to the development time.

So how can clients and vendors work together to avoid or mitigate these hidden costs?

Once you’re in conversation with a software development partner, it is useful to take a step back and focus on the problem you are attempting to solve rather than any specific solution that you may have in mind. Often, if you can work through this process collaboratively, blending your industry expertise with the partner’s understanding of software, you will identify a better solution than what you had initially envisioned.

Often, organizations without experience writing software or custom solutions may impose artificial limits based on their understanding of what’s possible. Up-front collaborative problem-solving can help avoid situations where you discover a hidden need – or make a major, costly pivot in the nature of the project – by starting out in a better direction on the first day of the project.

Remember: at its best, software development is a highly iterative, highly collaborative process. By fully embracing this process, you can keep the cost of custom software development down.

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