In this article, we will discuss the costs related to the development of business application software like Enterprise platforms (such as human resource management software, a sales CRM, and IT service management software, etc.) and internal tools (such as approval systems and inventory trackers), and customer-facing apps (such as booking portals or B2B ordering apps). This software supports core functions like payroll, finance, and IT support. These kinds of software are built by companies that specialize in enterprise software development. While an internal tool can cost anywhere from $ 15 K to $ 50 K, a custom ERP may cost thousands and thousands.
Build vs. buy vs. customize
Buy: When looking to buy ready-made software that tailors to the needs of your company, software like Zoho Books, Zoho Inventory, Freshservice, etc. Apps like these cost less initially, but as the headcount and the data grow, their charges per month grow accordingly. These are best for initial standard processes.
Customize: In this, you have already bought custom software or a ready-made platform that fulfills your requirements. You have the code for that particular software, so you can hire a custom software development company to customize your application as per your needs. In this case, your software development partner will alter the application. He will add some new features to it, and he may also change some features that were there when you bought the software.
Build(fully custom): In this case, you basically pay more upfront initially, but you own the software, and every part of the software is according to your needs. We do not have to buy a part of the software that is basically useless for you.
So when you have common needs like other businesses, you might want to just buy software. When you want to solve a particular challenge in your business, you buy a custom application and get it altered. Only get a fully customized application when you have unique needs, and you know that and already ready made software won’t be able to help you solve your business needs.
What makes up the cost of enterprise software
Two enterprise application software solutions never cost the same. Their costs depend on multiple factors:
Number of users and modules: When the number of users increases, the costs associated with the infrastructure and licenses will increase accordingly. Also, when the number of modules increases (Like finance, payroll, inventory), it would need more and more engineers who develop, test, and deploy them, therefore increasing the cost.
Customization and workflow complexity: Standard workflows are not that expensive to configure, but custom approval chains, rule-based access, and unique reporting add real effort, and that adds to the cost.
Integrations with 3rd-party apps: An enterprise software never works alone. An ERP always stays connected with an HRMS, ITSM with the CMDB, and other payment gateways, email apps, WhatsApp, etc
Data Migrations: Exporting data from your own old software or spreadsheets or Excel and feeding it to enterprise software takes time and Effort Because data mapping and validation take a lot of time
AI integrations: Nowadays, people are not actually interested in software that cannot explain itself, is not ready to use, or has a shallow learning curve. So, an AI assistant needs to be integrated with the application to explain the Features step by step and teach how to perform a particular task, and in some cases the user of the software might need the AI Assistant itself to do a particular task in the software. Therefore, the costs will increase as the Model usage increases.
Cloud deployment and infrastructure costs: When the software is being deployed on your own company servers, you will need hardware and network engineers and cloud DevOps specialists to manage the server functions So that cost is added along with the electricity costs. When you are hosting your application on a cloud platform like AWS and Azure, you are basically charged on a pay-as-you-go basis.
Cost breakdown by project stage
The cost of an enterprise business app is spread across the project life cycle. Below is the split
| Project stage | Share of budget | What it covers |
|---|---|---|
| Discovery and planning | 7-8% | Requirements gathering, process mapping, scope, and architecture |
| Design and configuration | 12-14% | UI/UX, workflow design, and system setup |
| Development and integration | 38-50% | Custom modules, APIs, integrations, and data migration |
| Testing and QA | 16-20% | Functional, security, performance, and user acceptance testing |
| Deployment and training | 12-18% | Go-live, user training, and documentation |
Hidden and ongoing costs
Training: After the application is done After it is completed the company needs to train the employees, so documentation and tutorials are needed. Those add extra costs to the process.
Maintenance and support: Debugging, security patch fixing, and tech support most likely cost 15 to 20% of the project every year
Evaluating the costs quoted by a vendor
Not all the quotes given by different vendors are the same; it is very important to evaluate the deliverables and clarify those with the Vendors. While we get to see companies that are ready to do the project at a very low price, that does not mean that they will deliver exactly what you wanted. Only after the terms and conditions on development, maintenance, and data ownership are clear with both parties should the agreement be signed. Everything should be transparent, and the software development partner should always clarify what he will provide and what he won’t.
Conclusion
So the cost of building an enterprise application software for your business depends on whether you want a product from a company that charges you every month and, as the data increases, the charge increases, or whether you want to buy a ready-made software application and get it customized later according to your needs. In a special case, when your needs are unique, you get a custom software application built from scratch. These kinds of applications can cost tens of thousands of dollars, so it is better to talk to specialized, experienced IT consultants in the industry. Contact us for a free consultation and get a cost estimate for your project