Software Development
Choosing the Right Software Development Pricing Model
Previously, software development outsourcing was like a vortex, tossing unwanted things into the swirling void. But now, as times are changing, outsourcing has proved its potential businesses are proposing various business projects they can’t handle.
That being the case, multi-fold corporations that provide outsourcing services offer numerous pricing models.
But what are the factors that reside in these pricing models? Let’s dig deeper!
Factors to Evaluate the Software Development Pricing Models
Fetching the exact cost of software development is the first of never. Hence, these factors help to evaluate the pricing of these software development processes.
Staffs
The number of members involved in the development process varies a lot. If you do not outsource the project to the software developers, it is going to cost you a fortune. However, the number of human resources depends on how many members are required to complete the project.
Environment
The productivity of the work also evaluates the cost of the software development. Having an enthusiastic team with an efficient work process can help in reducing the budget of the project. The resourcefulness of the workforce won’t be prone to glitches.
Project Complexity
The intricacy of the project also determines the budget. If it is a complex project, it goes without saying that it will cost you more. However, if the project scope is not much complex, the budget will be comparatively lesser.
Software Features
If your software requires a lot of features, it will again hit the cost. The functionality of the software matters. Not only that, but it also takes more time to develop and test all the features. This reduces the scope of cost-cutting.
The User Interface
There are apps like ‘nothing’ (you can find it on the google play store) about being mindful and being aware. It gives exactly what it promises — nothing. And there are apps like ‘Unix Banking’ with excellent UX design and features. Which one do you think will cost more? Of course, the app with complex UX.
Now, as we have covered most of the factors that determine the cost, let’s read about the pricing models.
Pricing Models in the IT Industry
Pricing models of a project can turn the tables. It can be the cause of success for your company. It can also be the traditional fixed price method; it doesn’t mean you only have to choose from the upcoming pricing methods. Oh, but for that, you first need to know the several pricing models. Let’s get on to it.
Fixed Price Model
This involves meeting several tech requirements through specified goals by consulting with the client(s). For example, the deadlines, budget, scope of work, and so on. The vital reason for relying on this model is the strategies are well-defined, serving as the cornerstone of a detailed backlog.
Milestone Pricing Model
This pricing method is usually used for freelancers or on freelance platforms like Upwork, Fiverr, Freelancer, etc. It is offered by the customers to the development team as they set milestones of the project together and start the development process. Here unlike the fixed price model, the payment is made later, after the project is delivered.
Time and Material Pricing Model
Here the client pays the developer for the time they spend developing the software. Also, the client needs to pay for additional charges, such as materials, frameworks, certificates, etc. This offers a huge deal of expense flexibility.
Service Subscription Pricing Model
It is also known as Software Development as a Service, in short, SDaaS. This is like a monthly or bi-weekly subscription-based pricing structure where the client pays on an interval and lets the developers explicitly work for their project. This pricing model includes all the functions, including development, testing, consulting, auditing and modifications as well.
Note: However, no matter how you choose the pricing of the project, ultimately, it depends on the scope and complexity of the software features.
The Final Thoughts
Every software development requires investment, and these models help the software developers and clients get an estimate of how much it will cost. The motto is to fetch the maximum benefit from the pricing model. And through this guide, I hope you understand the differences between these models and hire software developers who are right for your business.
Choosing the right team of software developers can be a rough road to ride, especially if you are a tenderfoot in this field. Hence, it is best if you go with the SDaaS model if you do not have familiarity with the software development process. The bottom line is, achieving success through a planned pricing model is essential for your project’s success.
