Which is cheaper: standard or unique?

Cost of custom software.

It is in the nature of things that an individually programmed software optimally fits the processes within the commissioning company. After all, the software is developed specifically to simplify these processes. But what about the development costs compared to standard software?

How much does custom programming cost?

The costs of an individually developed software are calculated from the effort in hours and the hourly rate of the contracted software company. In the case of software to be developed for small and medium-sized companies, this usually results in a five- to six-figure sum.

At first glance, this sounds like a lot. In reality, however, the client receives the rights of use for any number of benefits and an unlimited period of use in the case of individually programmed software. The following example shows the costs:

Calculated effort	450 hours
Price per hour	90 Euro
Total price	40.500 Euro

By way of comparison, the purchase of standard software with a monthly license cost of 49 euros and a term of two years results in total costs of 47,040 euros for 40 users. In this case, the individual software is therefore significantly cheaper than the standard software.

What are the additional costs for standard software?

The cost of a standard software is calculated from the license cost per user multiplied by the number of users. This is the important difference: the customer buys the right to use the software and not the software itself. Many vendors limit this right of use over time and the cost is incurred monthly or annually. But even if this is not the case, the providers urge their customers to regularly purchase new licenses. Since new program functions are only ever incorporated into new program versions and these incur additional license costs, the customer is exposed to constant cost pressure.

Further costs arise from the adaptation of the standard software to the customer’s processes, which is referred to as customizing. Since every company has its own peculiarities, standard software offers the possibility of individually adapting the standardized processes. The only problem is that the costs for customizing often exceed the license costs of the standard software and must also be reinvested with each new program version.

Standard software versus individual software
A quick cost comparison.

The table below compares the costs of individual software with those of standard software. It is easy to see that with a two-year useful life, the individual software is already significantly cheaper from 35 users. And the more users use the software and the longer the period of use is, the larger the cost advantage of the individual software becomes.

Beside the pure programming also expenditures for the planning of the software project develop with the production of the individual software. Who would like to cover the costs, should absolutely provide a requirement profile and a realization concept in co-operation with a professional software house. This brings a solid basis for the expenditure estimation, the cost calculation, the resource planning and thus also for the completion of the software in time.

On the other hand, the costs after the completion of the software are low. Since the software has been tailor-made, practically no further customization is required. Training can also be correspondingly short, since attention is already paid to an intuitive workflow during conceptual design.

Vergleich der Kosten von Standard- und Individualsoftware