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How much does custom software cost in the UK?

Custom software has no list price, which is why two agencies can quote wildly different numbers for the same one-page brief. The number is a reflection of scope, unknowns and how much risk the supplier is absorbing. Understanding those three things makes any quote far easier to read.

By Saleem Ahmed · · 7 min read

Last updated:

Abstract dark illustration of stacked cost blocks representing software development budgets

What actually drives the cost

Almost all of the cost sits in people's time. So the question is not really 'how much does software cost', it is 'how many weeks of design and engineering does this need, and at what rate'.

  • Scope: the number of distinct screens, roles and rules, not the number of features on a list.
  • Integrations: anything that talks to a system you do not control adds testing and failure handling.
  • Data: migrating messy existing data is often the single most underestimated task.
  • Compliance: payments, health data or regulated processes add review and evidence work.
  • Design: bespoke interface work costs more than adapting an existing design system.

Rough shapes of work

Rather than quoting figures we cannot stand behind, it helps to think in shapes. A focused internal tool that replaces a spreadsheet is a small, weeks-long piece of work. A customer-facing product with accounts, payments and an admin side is a multi-month engagement. A platform serving many organisations, with billing and permissions, is a programme of work that continues after launch.

When you receive quotes, ask which shape the supplier thinks they are quoting. Large gaps between quotes usually mean the suppliers are imagining different shapes, not that one is cheap.

How to keep the first phase affordable

The cheapest software is the software you did not need to build. Before development starts, agree the one outcome the first release must deliver, and let everything else wait.

  • Start with the workflow that costs the business most time today.
  • Use established components for anything that is not your differentiator.
  • Ship to a small group of real users before widening the scope.
  • Agree a written scope with assumptions, so change is a decision rather than an argument.

Questions worth asking any supplier

A good supplier will be comfortable with all of these: what is excluded from this price, what happens if an integration behaves differently than documented, who owns the code, what does support cost after launch, and what would you cut first if the budget had to drop by a third.

Saleem Ahmed, Director of CodeCue Technologies

About the author

Saleem Ahmed, Director of CodeCue Technologies

With an MSc in Project Management and degrees in Computer Science, Saleem has led a 40+ person in-house team delivering software, mobile and AI projects for international clients since 2018.

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Questions

Questions this raises

Why do quotes for the same brief vary so much?
Usually because each supplier is imagining a different scope. A short brief leaves room for interpretation, so one team prices a lean first release and another prices the full system. Ask each one to write down what they have assumed.
Is fixed price or time and materials better?
Fixed price suits well-defined, self-contained work. When discovery is still ongoing, a fixed price simply moves the risk into padding or into change requests. A short paid discovery phase followed by a firmer estimate is often the cheaper route.
What ongoing costs should I plan for?
Hosting, third-party services, security updates and a maintenance allowance. Software that gets used will always attract change requests, so plan for improvement rather than assuming a finished state.

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