Estimating The Cost Of Custom Software Development: The 2023 Guide

Last Updated

A growing number of businesses are considering custom software development as a solution to their business needs. The benefits of developing custom software are numerous, including better security, fewer defects, and the ability to change and upgrade it to meet your company’s demands. Yet, creating custom software can also be expensive. Companies are turning to third-party developers to create their own mobile apps and custom software. Unfortunately, giving a precise estimate is difficult. This guide will explain the average cost of developing custom software, the factors affecting them, how OpenXcell calculates these costs, and where to find custom solutions.

The average cost of custom software development

Depending on the project, custom software development services cost between $15,000 and $1,00,000. A business consultant must define each project’s specifics and assess various workloads and tasks in order to know software development costing. It considers how long it will take to complete a project and how many resources the company needs to deploy. Pricing models can be classified into three types: fixed pricing, hourly rates, and dedicated software developer cost. Companies can choose the option that best suits their needs in a given timeframe. A thorough understanding of the different factors will enable enterprises to identify where they need to spend and where they can save money. As a result, they will be able to save a lot of money on custom software development. You can build custom software quickly with OpenXcell, a leading custom software development company.

What are the key factors that affect the cost of developing software?

key factors that affect the cost of developing software

An entrepreneur must be aware of all the variables that can affect the project’s overall cost when planning for custom software development. Calculating software development costs depends on various factors. Having a clear understanding of these factors is crucial to determining accurate software development costing. Let’s explore the key factors affecting custom software development pricing without further ado.

1. Scope of the project

Project scope refers to the features and functions that the software should deliver. In comparison to a smaller scope, a larger scope typically incurs a higher development cost as it requires more time and resources. The cost of a project requiring multiple types of users, both web and mobile experiences, and/or integrations with other software products is likely to be higher than that of a single platform, single-user application.

2. Complexity of the project

The technical difficulty of the required work is referred to as the project’s complexity. A more complicated project will often cost more to develop since it may demand more cutting-edge technologies and specialized talents. For instance, implementing a basic e-commerce website on top of an established platform like Shopify would probably be considerably easier than creating a fully functional blockchain-enabled ledger system from scratch. Proper project planning, resource allocation, and decision-making depend on having a clear understanding of the project’s high level of complexity from the beginning.

3. The development team’s expertise and experience

The product development costs can also be influenced by the development team’s experience and skill. Since their talents are in high demand, a team with more expertise and experience would often cost more, but they should be able to accomplish the work more quickly and with fewer errors and systemic issues. On the other hand, a team with less experience and knowledge will typically be less expensive. As a result, the work will take longer or be of lesser quality when completed.

4. Project timeline

The project’s timeline might also affect the cost. Since it will take more resources and time to finish the project before the deadline, projects with shorter completion dates are typically more expensive. If a company is prioritising a rapidly approaching deadline over having more time to complete a project, it will typically need to hire more staff at a greater resource.

5. The size and location of the team

The development team’s size and location can also have an impact on the project’s cost. A project needing a larger team will normally be able to do the task faster, but it will also cost more due to the extra salaries and overhead expenses. While a smaller team can take longer to finish the job, it will usually be less expensive. These teams’ geographical locations are important as well. Language difficulties and time zone differences may cause general communication problems if a team is remote or situated in a foreign country. Compared to an in-person team with a higher cost of living, a remote team can benefit from a cheaper cost of living, which lowers the overhead connected with the organisation. You can hire software developers from India to lower the cost of software development.

6. Use of open-source technologies or 3rd party tools

The software development project cost can be decreased by utilising open-source technologies and third-party tools since the development team can use pre-existing resources and code rather than having to start from scratch. The use of Auth0 for application authentication as opposed to developing a custom auth flow is a perfect example of this. It can be difficult to choose whether to use open-source or third-party libraries to utilise in an application. It significantly affects the estimation of the cost of developing custom software.

7. Continuous support and maintenance

Last but not the least, the price of a software development project should take into account the continuous support and maintenance that will be needed after the first launch. Bug fixes, upgrades, and other maintenance activities that must be done after the initial development work is finished can fall under this category. It is crucial that maintenance or support services are offered when more users sign up for the platform in order to assist with product enhancements based on customer feedback as well as issue fixes that arise as technologies advance.

How do we estimate custom software development costs at OpenXcell?

The software development costing at OpenXcell is determined using several stages of project estimation.

  1. As part of our business analysis process, our analysts examine your project requirements, including the features and technologies you need, as well as the deadline you need for delivery.
  2. As part of the project scoping process, we schedule meetings or video calls with your product owners or project managers to discuss their visions for the final product.
  3. We prepare a proposal document that contains all the key project information with the help of our software architects and lead developers.
  4. After reviewing the proposal, we prepare a software development quote with estimated costs and offer optimization strategies, for example, another development methodology, a different technology stack, or a different team composition.

Hence, this process allows us to estimate the costs of your project in the most detailed manner.

Wrapping up

Estimating projects in exact terms is difficult without a thorough understanding of the project. It becomes easier for companies to provide the exact custom software development pricing when the client gives detailed information about the project. As long as the project is well-planned, calculating custom software costs is simple. So, it is crucial to work with a software development company that understands your business requirements and offers realistic app-building costs. The vendor’s response will be accurate if you submit a proposal with all the necessary details.

One aspect that affects the cost of bespoke software is the role of developers. As a result, whether you work with in-house teams, freelancers or software development outsource professionals, their experience may greatly impact the success of your project. Please feel free to schedule a free consultation with OpenXcell to get the precise cost of your project. We will be happy to help you achieve your goals, thanks to our decades of custom software development experience.

Get Quote

Niha Parmanandani

A dynamic content writer with a degree in Mass Communication and Journalism, she specializes in writing for web and social media.  It is her passion to play with words and keep up with technology trends. Her passion for reading drives her to create engaging, educational, and inspiring content.


Software Development - Step by step guide for 2024 and
beyond | OpenXcell

Learn everything about Software Development, its types, methodologies, process outsourcing with our complete guide to software development.

Headless CMS - The complete guide for 2024 | OpenXcell

Learn everything about Headless CMS along with CMS, its types, pros & cons as well as use cases, and real-life examples in a complete guide.

Mobile App Development - Step by step guide for 2024 and beyond | OpenXcell

Building your perfect app requires planning and effort. This guide is a compilation of best mobile app development resources across the web.

DevOps - A complete roadmap for software transformation | OpenXcell

What is DevOps? A combination of cultural philosophy, practices, and tools that integrate and automate between software development and the IT operations team.



In the past decade, blockchain and crypto experts have experienced a profound transformation due to the popularity of cryptocurrencies. It is projected that the global crypto wallet market will grow…

How to Create a Crypto Wallet?: A Step-by-Step Guide

Looking for a healthcare professional? Try Teladoc. Need help tracking your daily medicine dose manually? Well, Medisafe is the answer for you. Want to take better care of your physical…

13 Healthcare Apps Making Medical Care & Wellness Future-Ready

Building a web project and confused between Nuxt vs Next, what should you choose? Here, we will give you an overview of features, pros, cons, differences, similarities, and more to help…

Nuxt vs Next: A Comparative Analysis for Modern Web Development