Novus Team
2 min readMay 25, 2023

In the rapidly evolving technology landscape, understanding the cost of software development is crucial for businesses. As a pioneer in technological innovation, Novus provides an in-depth look at the factors contributing to software development costs and how they are calculated.

  1. The Driving Forces Behind Software Development Costs

Software development costs are largely determined by several critical factors. For instance, the complexity of the project, number of features, and the expertise level of the development team play significant roles. Furthermore, the team’s geographical location can considerably affect the overall cost due to varying labor rates globally. According to a 2022 report, developers in North America have an average hourly rate of $100-$150, while those in Eastern Europe charge around $25-$50.

2. Essential Components for Cost Estimations

At Novus, we believe in an all-encompassing approach to cost estimation, which includes:

  • Planning and Specifications: Comprehensive project planning and specification are the initial steps, accounting for around 10% of the total budget. This involves outlining project requirements and identifying necessary features.
  • Design: The design phase, comprising UX and UI, is pivotal for an intuitive and user-friendly application. This can amount to 15% of your budget.
  • Development: The majority of the budget, around 40%, is typically directed here. It covers the coding and creation of the application’s backend and frontend.
  • Testing: Rigorous testing is crucial to ensure the software functions flawlessly. This can constitute approximately 20% of the total cost.
  • Maintenance: Post-launch, the application needs continuous updates and support, which usually accounts for the remaining 15% of the budget.

3. Outsourcing vs. In-house Development

Choosing between an in-house team or outsourcing is a major decision impacting development costs. An in-house team offers more control and coordination, but outsourcing to a company like Novus brings a broad range of expertise, scalability, and cost benefits. In fact, according to a Deloitte survey, 59% of businesses outsource to cut costs.

4. Diverse Pricing Models

Two main pricing models dominate the software development market — Fixed Price and Time & Material. Fixed Price is ideal for small, defined projects, while Time & Material, preferred by 65% of businesses according to a recent survey, offers flexibility for long-term projects with changing requirements.

5. App Development Costs by Type

The cost of app development significantly depends on the type of application. Basic apps are more cost-effective, whereas complex apps like social networks or e-commerce platforms require more investment due to their advanced architecture and numerous features. For example, a basic app can cost around $25,000, while a complex app can reach up to $500,000.

At Novus, we emphasize the importance of a transparent understanding of software development costs for successful project execution. We commit to providing our clients with a clear and comprehensive cost breakdown, ensuring a streamlined development process and a high-quality end product.

Novus Team

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