July 15, 2020

What Are The Hidden Costs Of Custom Software Development

By William Roseberry

Custom software development is expensive, especially when you’re hiring an outside firm to get it done for you. What’s even more expensive are the hidden costs of software development that consulting firms may hide from their clients.

These hidden costs don’t always have an explicit monetary value. For example, many software consultants keep full rights to the software they develop (even when you pay for that development). Sometimes they even lower the price to entice you to accept that deal.

But what happens when you want to hire your own team of developers or you just want to switch to another consulting firm? They own the rights to the source code which locks your company into working with them unless you buy full rights to the software.

This article aims to breakdown some of the hidden costs of custom software development and help you navigate the world of software.

Change requests

The requirements of custom software change often. This means change requests are common. Sometimes changes are made because development is taking longer than expected or business analysts decided a new feature is important to customers.

Whatever the reason, changes are unavoidable. As a business owner or executive, you need to make sure you understand which features may need to change as development progresses, which features may be removed or added during development, and where problems are likely to occur throughout the project.

Understanding the factors that make change requests necessary will help you plan and budget accordingly.

If you’re hiring an outside development firm, they should be heavily involved in this process. You want to work with people who are transparent about the difficulties of software development and support you through the process.

Maintenance

Maintenance is something many businesses forget to account for. Without experience in software development, it’s easy to think that once a project is finished that’s it.

In reality, there will always be bugs that need to be fixed, features that need to be tweaked, and improvements made to the user-interface (UI).

A good consulting firm will help you budget the costs of maintenance into your development plan and there are many firms that include maintenance in their project costs.

If you decide to tackle maintenance in-house, make sure you understand the additional costs of hiring and training for developers.

Large software projects are complex and it may take months for a new developer to be comfortable with the code-base.

Management

Management costs are similar to maintenance costs. Typically management of software includes hosting, distribution, database administration, and more. These costs should be made clear early on in development.

Again, a good consulting firm will help you budget the costs of software management, regardless if your company will be managing the software in-house or not.

Server costs alone can quickly chew through budgets if not planned for carefully. It’s expensive to keep your software running 24/7 without issues but it’s more expensive when your servers go down.

Source code

Source code is the actual programming code that developers write to create software. Many firms license the custom software they develop for their clients, especially when they’re handling maintenance and management of the software.

This isn’t necessarily a red flag but it is very important that businesses understand what this means.

When a company licenses software to you, you may not be able to switch to another development company without buying the full rights to the software.

This may be a great option for your business as consulting firms are willing to trade money upfront for a guarantee of recurring revenue. Businesses that plan to partner with an outside firm can get tremendous value from an agreement like this.

Warranties

Warranties go hand-in-hand with maintenance and management. Make sure you understand what issues the consultants are responsible for after the project is completed.

You may find that a firm’s maintenance and management plan leaves a lot of responsibility to your own staff. It’s important to negotiate a warranty program that benefits your company in the short-term and long-term.

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Save time and money

You can save time and money by choosing a firm that understands the importance of transparency. We ensure our clients aren’t blindsided by the hidden costs of software development.

We offer a comprehensive Advantage Compatibility Analysis service to help businesses understand the benefits, costs, and requirements of custom software development.