What is The True Cost of a Customized Software Solution?

Customized software is a popular choice for many businesses because of its ability to be 100% customizable to your business’ processes and operations. But, the biggest hesitation for companies is the myth of the high cost associated with custom software.

This isn’t always true. The bottom line: custom software solutions do not always cost more than packaged, off-the-shelf, shrink-wrapped solutions. Inevitably, off-the-shelf solutions require a lot of adjustments to be a valuable resource for the company. That can be very costly. In fact, those solutions can turn out to cost more than a custom software package.

One concern of companies who decide on a custom software solution is the maintenance costs.

What do software maintenance costs cover? Why do they exist?

  • To prevent bugs that could interrupt service
  • To improve performance to make tasks faster and more efficient
  • To upgrade features to meet future processes, operations standards, etc. Remember that as your business’ processes improve (as they should), so should your software.
  • To perform data-back up and disaster recovery To cover hosting costs

What is the estimated amount for maintenance costs?

Maintenance costs for customized software usually run a reasonable 15-25% of the project cost. Don’t forget that maintenance fees must also be paid for package software, though it is often worded differently. For off-the-shelf solutions, you will pay for an upgraded version, new licenses, and anytime that you need support.

Custom software is the ideal solution when you have very specific needs for software to fit unique aspects of your business, like a process for selling and tracking those sales which is better than existing off-the-shelf application.

Additionally, keep in mind that when the software project has been well-defined, managed well during the development life cycle and well-tested, you will have minimal maintenance costs.

Lastly, when the project is completed by a professional, knowledgeable company, where the project is on-time, on-budget, and on-spec, the whole solution can provide a very significant ROI, often far in excess of the maintenance costs.