When the clients approach us for custom software development services, two of the most common questions they ask in the first meeting are: "How much will it cost?" and "How long will it take?". Unfortunately, estimating the cost of custom software development and its duration is not as straightforward as it may seem. Unlike the already built solutions, custom software is tailored to address specific needs, making both the cost and time estimates highly variable.
The Complexity of Estimating Custom Software Development Cost and Duration
Estimating the cost and duration of custom software development is not a one-size-fits-all process. Each project is unique, with its own set of requirements, features, and technical challenges, making it difficult to provide a precise cost and timeline estimate upfront. Moreover, each client is unique with different perspectives on the problem they want to solve. And, on top of that, each business has different budget and timeline constraints, which also, have a big impact on how the digital product will be built.
A discovery workshop is often necessary to understand the full scope of the project, identify potential obstacles, and estimate both the cost and time required. During the discovery workshop, the development team collaborates with the client to clarify objectives, define the scope, outline requirements, and develop an app development checklist—all of which directly influence the final cost and timeline.
Custom software often addresses problems that are not only unique but also complex, requiring most of the time significant time to research, build, test, and deploy. If these problems could be solved easily, there would already be existing SaaS solutions available in the market.
Disclaimer: As I mentioned in my previous articles, having a comprehensive discovery workshop doesn't guarantee you will have a 100% accurate duration and cost, but tt will give you a good vision that is close enough to reality, to have a good idea of how much it will cost and enough data to make good decisions.
Custom Software Development and the Car Industry: A Similar Evolution
To better understand why estimating is so complex let's consider the evolution of the car industry 100 years ago. At that time, most cars were custom-built to meet the specific needs of each owner. Every car was a unique creation, which made both the cost and time to build highly unpredictable. As the industry evolved, manufacturers started to standardize the production process, and in the end, Henry Ford gave birth to assembly lines, where cars could be produced in mass and more efficiently. This reminds me a lot of how SaaS platforms appear today.
Similarly, in the software industry, custom solutions often pave the way for mainstream products. When a custom solution becomes widely adopted, it transitions into a SaaS platform. This transformation occurs because the problem it solves becomes well-defined, allowing the solution to be streamlined and marketed to a broader audience.
For example, Slack started as an internal communication tool for a gaming company, but when its utility became apparent to other businesses, it was transformed into a SaaS product that is now used worldwide for team collaboration. Another good example is one of the projects we built for the Medtech industry - the Clinic Management Platform. At the beginning, the client wanted to digitalize their internal needs, but afterwards, they found out this need in the market, and they put the entire experience in building a SaaS that can be used by any physiotherapy clinic from Italy.
The Perspective of a Software Development Agency
Building a custom software product is challenging because there is often uncertainty about the exact needs of the end user. The product must be designed to be adaptable and flexible, but not overly so, as this can cause costs to grow exponentially. At the initial stages, it is still unclear which features will be widely adopted by the users. This puts a significant burden on the software development agency, which is expected to guide the client through these uncertainties, forecast potential needs, and provide an estimate of custom software development cost and the time required. Despite the fact that these variables are often unpredictable.
To be clear, estimating the cost of custom software development is not impossible. At Webamboos, we do provide cost estimates for fixed-price projects; although, this is usually limited to industries where we have substantial experience, such as MedTech, Logistics, or FinTech. Moreover, the requirements must be very well defined, and the functionalities don’t involve highly unusual or complex implementations. This familiarity allows us to provide more accurate estimates because we understand the typical challenges and solutions within these industries.
In conclusion, estimating the cost and duration of custom software development is complex due to the unique nature of each project and it will remain like that for every digital product that is solving a new problem or in a new way. Businesses must navigate the complexities of custom development, which requires a flexible approach to estimating both cost and time.
For more insights on this topic, we recommend reading our detailed article on the Custom Software Development Cost. It offers an in-depth look at the factors that influence the cost and timeline and provides practical advice for managing your project.