The traditional custom software development even offered by the best website development services in the market can be quite costly and the process can be slow and frustrating. So when you decide to have custom software as a service do take into account that developing it is just the tip of the iceberg.
To have proper and effective customized software for your business or product it needs to have a full life cycle that starts from development and then moves to deployment or running of it and then maintaining it. While most companies take into account the development cost of software but often are surprised by the hidden cost the later two phases incur.
Hence when contacting a custom software development company for software development services that is customized one should ask three vital questions:
• What is the expense should you plan to go beyond the development phase?
• How would you know you have been budgeted enough?
• What is the comparison between the long-term costs and the long-term seat license cost from a SaaS (Software as a Service) product?
It is vital that all these questions are asked and answered correctly by the software development service provider from the onset of the project. Furthermore, the provider of best website development services would take into account the TCO (Total Cost of Ownership), i.e. bot direct and indirect costs associated with the software. So as a customer when you are tallying up the project’s expenses and fees you will be in a position to calculate the ROI.
A custom software development company primarily divide a project cost into three main categories Development costs, Implementation and Running costs and Maintenance Costs. Since in this article we will focus on the hidden costs of running and maintaining custom software we will just browse through the points under development costs.
1. Development Costs
Under development cost category there are three major categories and all of them are initial one-time costs that are required for developing the software. They are:
• Development team and Labor
• Hardware
• Internal system integration
2. Implementation and Running Costs
• As a provider of custom software as a service a custom software development company should be capable of providing four major services under this category. Often while developing software these four hidden costs are looked over. These four services kick in after the development phase has been completed and as a customer, you should be aware whether running and implementation of the software are included in the contract.
Find out the details like hours that has been planned to provide the support within the contract, how many consultants will be there. In case the numbers are low asked for additional support and the cost. The four services that are part of the implementation and running of the custom software services are:
• Software configuration and testing: This service includes checking whether the software developed meets the requirements set by your company, configuring it for the users, testing the functionality and usability of the software. Generally, in a custom project, it is included within the project quote. However, it is always better to ensure if you have to pay anything extra.
• Hosting: If your company is not hosting the software onsite then with the custom software service provider you have to plan off-site hosting place in exchange of a monthly fee.
• Data migration: After developing a customized software a company might need to reformat and move the existing data to a new system, which would ensure data quality and eliminate redundancies.
• Training: All new software introduces new features to the users and the training cost depends on how the changes will affect the existing workflow and the process. Depending on the workforce size the training needs and the cost will be determined. Part of the process and the hidden cost is slowing down the training process while the employees learn the new system to increase productivity. While these might not be part of the software budget but they are real costs and needs to spend as part of running the custom software.
3. Maintenance Costs
Once the software has been implemented and it is running properly there is an ongoing hidden cost that is required in maintaining the efficiency and effectiveness of the software. For that, ongoing maintenance and upgrade of the system need to plan that is relevant and functional over a long time. Maintenance of software is often sidestepped in the budget while the initial cost estimates of software are being done, but it is a recurring and important hidden cost. Here is the list of those costs that need to be taken care of under the maintenance category.
• Backups/ Recovery: To retain the efficiency of the customized software one needs to invest in a reliable backup and disaster recovery management solutions. The cost depends on the size of the system and your requirements.
• Security: With data and know-how that are stored at stake one cannot afford to lower the security of the software. Hence it is of utmost importance that your system is safeguarded.
• Support: Part of the customized service received from a software company is that you get the maintenance so negotiate that. A software requires maintenance over its life in both the sectors, i.e. online and keeping it functioning efficiently.
• Version updates: For your custom software to avail the latest innovations you should always factor in the expenses required for updating the software to the latest versions.
• Bug fixes: The software team is required to keep an eye on the software to identify any glitches or bugs after it has been launched.
• Adding features: In case there has been a change in the workflow or environment of the software than to retain the functionality additional features are required to be added.
• Ongoing training: As and when the software is updated users might need additional training on the new features and also new employees working with the software would require the same.
• Scaling the system: if the software was initially planned for a certain number of people and the organization grows than the software needs to be scaled.
While we have not been able to discuss all the hidden costs associated with running and maintaining custom software but this gives you an idea of what to expect after the developing stage is complete. Since each organization is unique and has specific requirements it is important that you look into your software and its requirements in detail and then identify the hidden costs that need to be associated with running and maintain the software.
