Custom Software Development Costs: 4 Tips to Reduce Expenses
Custom software development costs have always looked higher than just buying some software product that is already on the market. Despite that, huge enterprises can prove that this is only on the first look and anybody can reduce expenses for the custom software development and save a ton of money with outsourcing.
Existek is a custom software development company helping our customers to solve their business challenges with best in its class software. Contact us to get an instant and free expert consultation about your custom software development project.

Still, trying to decide between having custom software developed by a consultant or buying pre-developed software is never easy. Custom software development services let companies modify their day-to-day operations and create specific objective set apps. In comparison to store-bought software programs, custom software has the uncanny ability to function just as you need it to. Because all companies have their own individual needs, it’s hard for a single product to handle numerous requirements at once. The main benefit of the custom software is that you can have the final price altered, but each version may either more expensive or much cheaper than its predecessor. We have already explored where these rates come from in our recent article “Key Factors that Determine Custom Software Development Rates“. Also, we strongly recommend you to have a look at our “2017 Global Custom Software Development Rates” guide, where you can learn actual prices for services and specialists in various global locations.
Once we’ve already understood pricing, it’s time to get the best rate possible for custom software development services with the following suggestions.
HOW VENDOR’S LOCATION IMPACTS CUSTOM SOFTWARE DEVELOPMENT COSTS

For the most part, vendors located in metropolitan cities are the costliest. The high costs of city living are apparent in company expenses (particularly labor and overhead rates). High custom software development costs impact the rate customers are charged. Because it’s unfeasible for the average procurement to stimulate the underlying economic aspects that influence vendors’ fees, the best way to bypass paying big city rates is to circumvent the issue outright. Look at vendors outside of the big city.
Non-metropolitan pricing can differ from city rates by as much as 50%. You can get a substantially lowered project price for the same service from a custom software development company in a nearby area. This alternative usually doesn’t have much to do with what the vendor is capable of. Often, “near-shore” or remote vendors can provide the same skill sets, talent, experience, and expertise. A qualified and skilled vendor can the same work done that one residing inside of the city can. Further, remote contracting is ideal to work within the software field. Little to no tangible materials need to change hands with a software contract. Not very many development jobs happen in person, anyways. Although the developer is working progressively, there is seldom something a customer or client needs to come in and look at. In just about all regards, it hardly matters where the development work is being conducted. That said, some prospective software customers might frown at this thought. They may believe that the need to meet face to face is vital. For those individuals, the opportunity to make eye contact and shake hands may more important that lowering custom software development costs.
No matter where they are, many vendors would be pleased to meet with a customer face to face (with a slight increase in cost, which would be negligible in comparison to money saved). Many vendors would also be more than happy to incorporate live chat rooms and on-demand video conferencing, which would accomplish many of the same advantages of meeting in person. If you determine that the money saved from contracting remotely are too important to bypass, then it comes down to a question of how remote you’re willing to think about.
ACCURATE QUOTES COME FROM TRANSPARENT NEEDS

While software vendors will make queries in reaction to RFPs, it’s not very common to come across an impactful procurement that thoroughly investigates all the fine details of a project. Many times, various project aspects will stay moderately vague, despite the vendor answering a question. When proposals must be prepared, vendors will articulate any outstanding gray areas into specific details about the scope of a contract. For safety’s sake, most vendors will just assume the worst for the sake of feeling content that their own expenses will be paid for in such circumstances. Although this approach might mitigate a vendor’s potential risks, it also means that the customer will obtain more bids, since vendors will be taking more labor into account than required to achieve the scope of work. In several cases, vendor’s assumptions would raise the proposed custom software development costs by at least 30%. Further, the difference in costs is usually not in sync between vendors, since each vendor may have assumed a different figure. This generally results in any endeavored comparisons between vendors moving ahead, but with reserved judgment. By correctly translating a custom project’s scope, a customer can effectively minimize any guess work from the vendor. Transparent and consumable needs will also decrease the potential latitude for misunderstanding. What is necessary is a thorough explanation of the fundamental jobs that every category of user will achieve. In doing so, each role will receive proper consideration on an individual basis, and systematically articulate the complete scope of relevant functionality. Additionally, it means systematically considering the impact of purposed data types, business logic, screens, and system behaviors, in addition to regular application functionality (ex. user account administration).
If the job has been performed properly, the result should be a thorough and lengthy list of statements that are functionality-oriented and role-based, joined by a fair amount of supplementary explanation. Effective statements of scope are “user stories”, like this one: “With the role of administrator, I require the need to produce, update, review, and delete user accounts”. With the scope presented in the proper format, you’ll simplify the process for a development team, allowing them to confidently give an estimate for the project accurately. Get some help if this is your first time doing something like this for a development project to see the significant cut of the custom software development costs.
USE VALUE TO PRIORITIZE FEATURES

During the start of a custom software project, stakeholders are generally excited, and their imaginations are limitless. Dreaming big might lead to the belief of an elegant functionality. At some point, reality will set in, and those involved will see that that the budget won’t accommodate their dreams.
When it comes to software projects, be mindful that a completely elegant solution might not come right away. This shouldn’t discourage anyone from giving up on those dreams, though. It simply means that we need to scrutinize every aspect that needs to be customized, taking into consideration whether every factor is necessary. Elements that are frivolous should be the first ones to be removed from the scope of the project. A surplus of such items can be found in the scope of supportive services that come with a majority of development contracts. For example, more often than not, customers ask for more training than what is required for a new solution. Instead, users can engage in some short video training (not live training). If the software is developed for usability, this approach could be effective, and it would also reduce custom software development costs. If the project is too robust to squeeze into the budget after removing what wasn’t necessary, priority should be given to the numerous points of desired functionality. Begin with a small amount of custom software that will please the most basic business requirements. When the software ends up being valuable and useful, subsequent extensions of the current functionality will be justified. As a matter of course, the Agile tactic describes the development of an artifact known as the “Product Backlog,” which permits the simple prioritization of desired solution features based on complexity and requirements (cost).
Afterward, the Agile development team sends out these features in increments, assuming the customer wants to have the development initiatives sustained. If the customer is happy with the project’s state, they can have work stopped immediately, or they can have it paused and have it resumed a time of their choosing. It is worthwhile for a customer to collaborate with a qualified vendor to assess priorities before an RFP is released. The qualified vendor’s professional insight can be beneficial in finding subtle efficiencies so that the greatest value can be delivered for the amount of money spent.
CREATE WHILE LOOKING AHEAD

It can be troublesome for anyone to guess what the future holds. The software you develop today might not be necessary tomorrow. It is typical to see customers asking for more modifications and new features right after their “completed” projects are released.
While bespoke software can be adjusted as per customer request, the developer must have an idea of what kind of modifications to expect. This allows the developer to create software that simplifies the implementation of inevitable alterations, which will significantly decrease custom software development costs in future. At the very least, ensure that your vendors know that you seek solutions that are extensible, and when possible, advise them to use “loosely coupled” components. Such a technical directive tells the software architect that the program should be developed to allow elements of the program to be easily replaced, swapped out, altered, and upgraded.
Treat the vendor as a member of your team. Take some time to provide the vendor with organizational context. Let the vendor know about your company’s objective, and advise them of any long and short-term goals. Further, ensure they know how the company’s vision for the future with regards to the development of the software. By following these steps, you’ll present the vendor with a chance to assess things before jumping into the work and cut custom software development costs for the new versions and features.
Although this won’t result in short-term cost savings, with some time invested on your end, it will allow the vendor to make proper software development choices, and perhaps even allow them to offer suggestions and guidance that will save money, time, and work down the road. This can have a huge impact in TCO (Total Cost of Ownership) for big STRATEGY projects.
SUMMING IT ALL UP
When the relevant structure for a project has been set in the procurement process, custom software development costs can be lower than you think.
During procurements, if key choices were made, the concept of “vendor lock-in” will hardly be a concern if you need a tailored solution. If the vendor you selected is using open and appropriate development methods that adhere to the relevant standards, there won’t be an issue finding other service providers, if that becomes necessary. Most companies also find it beneficial to hire a “product owner” that is qualified (i.e., the technical representative who stays cognizant of the complete scope of future custom software project plans).
With that in mind, we usually suggest treating the vendor like a valued business partner. By hiring a vendor with professional integrity, offering assistance, involving them in coordination, bypassing conflicting negotiations, and providing positive advice when appropriate, you will practically lay the foundation for a lengthy and mutually beneficial relationship. This will prolong your customization budget to levels that exceed what you initially thought possible.
These are four simple steps that will help you to decrease custom software development costs and bring simplicity in the development process. Of course, there are even more of various tricks out there. You can always Get In Touch with us to discuss how you can get the best possible price for the development of your upcoming or even running custom software projects. Visit our Services Page to learn more about our capabilities.
What techniques do you use to reduce custom software development costs? All your comments and contributions to this blog in the comments section below will be highly appreciated.
Download “2017 Global Custom Software Development Rates” to get a comprehensive analysis of the pricing in three most popular onshore and offshore outsourcing locations. Hourly rates cards for these territories are included.
Existek is a custom software development company helping our customers to solve their business challenges with best in its class software. Contact us to get an instant and free expert consultation about your custom software development project.

