One of the most central and therefore also one of the most common questions related to software development in terms of investments is: “What does software development cost?” Naturally, this is one of the most critical factors when business decision-makers evaluate the current state and future needs of their digital systems.
Some of the most common challenges related to systems include the following situations:
- digital services used by the company are entirely or partially outdated,
- systems only partially meet the company’s business needs, or
- existing digital systems do not support business scalability.
Digital services, such as web applications or mobile applications, are at their best key enablers for scaling a business and achieving related goals. When it comes to software development, delivering business value is always our top priority. We take it seriously that our clients receive genuine value from the systems we develop.
For us, business value means gaining a comprehensive understanding of the client, their needs, and the system to be developed even before starting the collaboration. Understanding the client, the problem to be solved, and the users of the product or service is therefore a crucial starting point for the partnership. This ensures that the product or service addresses a genuine need, which, in turn, is an essential foundation for making the investment.
In this article, we delve into the question of what software development costs. Since every company’s needs are unique and development is carried out through a wide variety of collaboration models, we cannot provide a very precise estimate of software development costs in this text. However, we aim to address this question at a high level and hope to have the opportunity to discuss your needs in more detail to provide a more accurate estimate of the project’s cost.
What factors influence the cost of software development?
The cost of software development is influenced by numerous factors. The most significant ones are the complexity of the work and the scope of the project, meaning how complex the system being developed is. This includes factors such as the number of features to be developed, the number of third-party backend systems involved, and various technological solutions. Other factors that affect the cost include the size of the team, the experience level of the developers, and the project timeline.
The size of the development team and the collaboration model
The size of the team, including software developers and UX designers, is naturally one of the key factors in pricing. The hourly rate for software development can range between 70 € and 150 €, depending on the consultant’s expertise. UX design typically has an hourly rate in the range of 80–100 €.
Another key factor influencing the cost is the collaboration model we choose as the foundation for our partnership.
If our client company has its own development team and needs extra hands or specific expertise, Identio’s software developer works as part of that team. This type of “additional resource” is an easy alternative to hiring a dedicated software developer. Additional resources are often needed when the in-house team lacks the technological expertise required for the project or when the project aims to prototype the suitability of new technologies for the client’s use. Other situations where consultants can be utilized include boosting efficiency as deadlines approach or ensuring continuity of development work during holiday periods. This is our most common collaboration model, and in such cases, hourly-based pricing often applies.
Additionally, we offer two different approaches where Identio’s own development team creates an entirely new system tailored to the client’s needs. The first approach involves close collaboration with the client, while the second is more of a turnkey solution. In the close collaboration model, we focus on transferring knowledge and skills to the client organization through coaching-oriented software development. In the turnkey solution, on the other hand, we develop a predefined product or service with a more independent approach, keeping the client’s role lighter. This model is well-suited for situations where the goals are clear, and the development team and client are aligned on the system to be developed.
Pricing for both of these models can be either hourly-based or fixed. In the case of fixed pricing, we agree with the client on a price range within which we commit to staying.
Other factors affecting the cost of software development
Several other factors also influence the costs of software development, and these should be considered when planning the project budget. The first key aspect to evaluate is the scope of the project. Are we building a lightweight MVP (Minimum Viable Product), an MLP (Minimum Lovable Product), or a more comprehensive software solution? Smaller projects are naturally more affordable, but the planning, implementation, and testing of larger systems require more resources.
The technologies and platforms used also affect costs: some technologies require specialized expertise, which can increase the project’s price tag. The team composition, tight deadlines, and post-launch maintenance and further development costs are other key variables that should not be overlooked when planning the budget. These factors together determine the appropriate budget to allocate for software development.
How to make software development cost-effective?
Cost-effectiveness in software development begins with a thorough definition phase. When a development project is carefully planned in advance, expensive changes in later stages can be avoided. A comprehensive requirements definition saves both time and money and helps the team focus on what is essential. Additionally, prioritizing the most important features is key, for example, through MVP (Minimum Viable Product) or MLP (Minimum Lovable Product) thinking. This means focusing in the early stages of the project on delivering a minimal yet lovable solution that addresses clearly defined needs.
Through agile development and iterative thinking, the development process can adapt quickly to changing needs and feedback from users. This approach helps allocate the budget to features and elements that are genuinely important from the users’ perspective.
Choosing the right team is also a critical factor in ensuring cost-effectiveness. A team with experience in similar projects can typically deliver high-quality results while managing the project efficiently and smoothly. Cost-effectiveness doesn’t always come from selecting the cheapest provider or partner but from professional work where things are done right from the start.
Well-executed software development delivers long-term value and, most importantly, supports the growth of your business. In contrast, cheap development done with insufficient expertise can ultimately result in costly repairs and rework.
Concrete pricing examples
It is challenging to discuss software development costs with absolute precision, but I hope these examples provide you with a general idea of the expenses involved in software development.
These examples are based on Identio’s pricing and apply to digital products and services tailored and developed to meet your needs, as well as the hourly billing rates of our consultants.
| Tailored digital products and services, and consultants’ hourly rates |
| Medium-sized software: ~30 000–100 000 € |
| Comprehensive custom software: ~100 000 € + |
| Software development / IT consultant hourly rate: 80–120 € |
| UX designer’s hourly rate: starting from 85 € |
Software development cost estimate
The cost of software development is highly case-specific, and we hope this article has provided you with indicative information about the scale of the investment. We look forward to discussing your specific needs and exploring what software development might cost in your unique situation.
Contact our sales team, and we’ll help you identify your company’s specific software development needs. Through discussion, we can jointly assess the scope of technical implementations and provide a rough estimate of development costs.
Identio as a technology company
Identio’s software developers specialize in consulting, which means we work closely with our clients throughout the entire process—from designing a digital product or service to its development and maintenance.
We design sustainable software architecture solutions and develop digital products and services with a focus on user-friendliness, scalability, and cost-efficiency. We are also here to assist you with updating and modernizing your existing systems.
