Best Tips To Reduce Your Software Development Costs

Many businesses today require custom solutions to effectively dispense their obligations and deliver qualitative services to a high-demanding market. The only problem is that custom software development costs are typically not cheap.

According to our estimation, the costs of developing custom software can range from $10,000 – $500,000, even more, depending on the project size, business type, and demands. And if you’re on a budget, it may seem impracticable to achieve your development objectives, especially with regard to quality.

For most brands, especially startups operating on a lean budget, finding efficient ways to cut software development costs without compromising on quality delivery is a top priority for the future.

But how do you achieve quality output with limited resources? We’ll find out in this guide.

Software Cost Factors

Before creating a budget for your software development needs, there are quite a number of factors you should be aware of. These factors influence the product development costs and differ according to the app development stages.

Software Complexity

This is one of the biggest drivers and most obvious factors influencing development costs. There are different programs with varying functions. Some are lightweight and mono-functional, and others are heavy and multifunctional. Essentially the more functions and features software has, the higher the development cost.

What determines the complexity of your software is the intended use case. For instance, a fintech app may need to have more features than a logistics tracking application. Hence, the cost of developing both programs will likely differ.

According to research, a simple app can cost between $16,000 – $32,000, while a complex app usually costs above $70,000.

Business Type

Another critical factor influencing software development costs is the business behind the project. The size of the business, its audience, the business offerings, etc., all play significant roles. For instance, the demands and cost of software development for small business would be typically lesser than that of an enterprise.

Tech Stack

The technologies and programming language used to develop custom software also impact costs. Some programs can be created using just one API; others may require different programming languages for the front-end and back-end. This would mean integrating other technologies for smooth operation.

Additionally, the demands and use of the software may warrant the integration of several tech stacks.

Development Team

Although businesses frequently downplay this factor, it has a significant impact on the pricing of software development. The type of collaboration you employ and the size of the team add up to the final cost. For instance, some organizations may employ an in-house development team while others may outsource their projects to agencies, outsourcing, or offshoring teams.

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All the various types of collaboration have their perks and challenges. Your choice should be based on your budget and the requirements of your software.

Software Maintenance

A thorough software development cost should include an estimate for maintenance. Usually, business software undergoes routine maintenance to sustain and improve performance, fix any problems, integrate new features, and adapt the program to meet the evolving demands of the market.

The type and level of complexity of the software will determine the frequency and depth of maintenance required. This would definitely influence the development cost.

How To Save Your Budget On Software Development

Most companies overspend on software development; according to CIO, 94% of companies overspend on cloud infrastructure, which is just an aspect of many software development projects. However, software development costs are a sensitive subject.

Even if you have a large budget, you wouldn’t want to overpay; at the same time, you have to be careful so that you don’t sacrifice quality for affordability.

Here are some useful suggestions that can help reduce software development costs.

Discovery Phase

The discovery phase in a software development project is critical to the project’s success. This sets the tone and gives the needed direction on the best approach to adopt. The primary objective of the discovery phase is to identify the needs of the target users, establish the project’s goals and scope, and ensure that the outcome aligns with the target audience’s expectations.

The discovery phase also defines the tech stack and budgets required to execute the project. It involves extensive research, data gathering, analysis, and planning. At this step, you evaluate the viability, practicability, and usability of the proposed product. 

The discovery phase may also involve developing a prototype to test the functionality and acceptability of he product.

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With a clear understanding and well-defined purpose, unnecessary expenses and wastages can be avoided. A well-executed discovery phase will steer the entire development cycle, including budgetary and resource expenditures.

Cross-platform App Development

The app market is large and multi-operational; many apps run across various platforms and operating systems because users have their preferences. And as a business, it is critical that you accommodate all users, notwithstanding their preferred operating system.

For instance, android and ios are two of the most popular mobile operating systems. Combined, both operating systems hold over 99% of the global mobile market. This implies that companies must develop their solutions for users on both operating systems.

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Implementing cross-platform development enables the simultaneous development of mobile applications that are compatible with multiple operating systems. This is opposed to native development, whereby an app is developed specifically for an operating system per time. In essence, the company will need to develop unique applications for each platform, making it more expensive.

Instead of creating unique mobile applications for each platform, cross-platform app development enables developers to create software that can run on many operating systems.


Software development outsourcing involves delegating development projects to independent developers outside your organization. In this instance, the company collaborates with an outsourcing agency for a duration and contracts them to handle certain projects.

Software development outsourcing has been gaining traction in recent years, and more companies, especially within the bracket of SMBs, are adopting this model to save costs and promote efficiency. According to a Deloitte survey, 70% of brands who adopt outsourcing do so for cost reduction.

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This is possible because software development rates vary across geographical locations. For instance, the custom software development cost per hour in eastern Europe is significantly lower than in the United States. While you may be charged between $80-$100 in the US, in eastern Europe, you may be paying between $35-$60 per hour for the same project description.

Below is a table depicting the average hourly rate of outsourcing custom software development according to various locations;

Eastern Europe$35-$60
United States$80-$100
Western Europe$60-$80

To Conclude

There seems to be a global financial crisis at hand, inflation is on the rise across nations of the world, and layoffs and cutbacks seem to be trending. Most brands and startups just want to survive the uncertainty while still delivering quality services.

Although there is no specific answer on the question of how much does software development cost, going into the future, It is increasingly important for businesses to adopt cost-efficient practices as they continue to advance the business with innovative solutions.

Admittedly the task of reducing software development costs while maintaining quality output will not be easy, but with a thorough perusal of this guide, you’d be on your way to achieving increased efficiency.

Jonathon Spire

Jonathon Spire

Tech Blogger at Jonathon Spire

My diverse background started with my computer science degree, and later progressed to building laptops and accessories. And now, for the last 7 years, I have been a social media marketing specialist and business growth consultant.

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Jonathon Spire

I blog about a range of tech topics.

For the last 7 years I have been a social media marketing specialist and business growth consultant, so I write about those the most.

Full transparency: I do review a lot of services and I try to do it as objectively as possible; I give honest feedback and only promote services I believe truly work (for which I may or may not receive a commission) – if you are a service owner and you think I have made a mistake then please let me know in the comments section.

– Jon