One of the most frequently asked questions companies have when planning a tech project is: “How much does it cost to develop custom software?” The answer isn’t simple, because the cost varies based on multiple technical, functional, and strategic factors.
In this article, we explain the main elements that influence the cost of custom software development, so you can better plan your budget and make informed decisions.
The functional size of the system is the most important factor. Developing a simple order-taking app is not the same as creating a full ERP system with multiple modules.
Tip: Divide the project into phases or an MVP (minimum viable product) to reduce risks and facilitate staggered investment.
The tech stack (languages, frameworks, databases, cloud services, etc.) also impacts the budget.
Newer or more complex technologies usually require more expensive technical profiles.
Connecting the software with external platforms (APIs, ERPs, payment gateways, CRMs, etc.) can significantly increase the cost if the integrations are poorly documented or require additional development.
Example: integrating with a well-documented API like Stripe is cheaper than connecting with a legacy or proprietary system.
An attractive visual design with an intuitive user experience may require greater investment in wireframes, prototypes, and usability testing.
If the software handles sensitive information (personal, financial, medical data), it will need additional security protocols (encryption, roles, audits, backups, etc.).
In addition, compliance with regulations like GDPR, HIPAA, or PCI DSS may involve extra development time, legal review, and documentation.
The country or region of the software provider can impact the hourly development rate. For example:
However, it’s not just about price—you should also assess quality, experience, communication, and support.
Do you need the project ready in 3 months or 8? The shorter the deadline, the higher the cost, as it requires more personnel, higher work intensity, and less room for error.
Once development is complete, many companies forget to account for the costs of:
This can represent between 15% and 25% of the annual budget.
A professional development process should include:
If not considered from the beginning, adding them at the end can be more expensive.
Will your company fully own the source code? Will commercial-licensed components be used?
These factors must be clearly defined in the contract and can influence the price.
Although each project is unique, in general terms:
Keep in mind these amounts may vary based on country, provider, hiring model, and project scope.
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