Custom Software Development: Understanding Its ROI

1. Custom Software Development: Understanding Its ROI Investment in custom software developmentis a big decision. You are devoting your effort, time, and money to engineer a tailored solution for your business requirements. How can you know that it is actually paying you off in the correct manner? You can easily understand by measuring the ROI (return on investment) for the solution. For that it is important to understand strategic and financial benefits of the solution for justifying the cost. This blog will let you know if it is worth to invest in custom solution for your business. So, read on to know them. How much does custom software development cost on an average? Custom solution doesn’t come with any universal or fixed price tag but you can get an idea from the estimated cost. The simple solution with basic functionality and minimal features can cost around $60,000-$90,000. Advanced solutions featuring moderate integrations and features will charge anywhere between $90,000 and $250,000 whereas complex solutions will incur $250,000+ and it will be available with extensive integrations and advanced features.

2. These are mere ballpark costs and the actual expense depends on certain attributions such as the utilized tech stack, project scope, project duration, the expertise and experience of the team. Remember, any complex enterprise-grade system will be slightly expensive over a simple application with a few features. So, making an investment in it is not a bad idea or affordable option. But once you attempt it correctly it will continue to pay back you for the years to come. To know if the investment is worth or not you need to calculate the ROI for your investment amount along with its key metrics for regular monitoring.  Methods and metrics for calculating custom software ROI To understand the calculation method let’s consider an example.  Suppose you have developed a new eCommerce app with $200,000 that generates $500,000 in revenue, then the ROI on custom softwareis 150%. It clearly shows that for every invested $1 you have received $1.50 in return.  But calculation is not a matter of concern. It is always about measuring overall benefits of the software starting from cost savings, revenue increases, overall business growth, and new revenue streams.  Now, we will navigate you through the key qualitative and quantitative metrics for measuring the ROI. 

3. Qualitative metrics • User satisfaction- Customer and employee satisfaction needs to be monitored through NPS scores, direct interviews, and surveys.  • Adoption speed- Track how fast customers and employees can transition to the software completely and at a regular basis. Slow adoption is a warning sign.   • Decision-making efficiency- Software providing clear and fast insights help the team to make better business calls.  • Process simplicity- Custom solution is free from friction with less number of steps involved.  • Competitive advantage- Software that is available with better service, unique features, and smooth experience is a win-win situation.  • Brand perception- Modern-looking, smooth running, and intuitive software reflects the professionalism and innovative mindset of the business.  Quantitative metrics • Revenue increase- Check the rate of increase in revenue generation through upsells, sales, and new business opportunities.  • Cost savings- Measure the cost you are saving with automated tasks, alleviation in labor expenses, and eradication of redundant subscriptions.  • Productivity gains- Measure the time you can save through streamlined workflows, acceleration of processes, and better team collaboration.  • User adoption rates- Track how many customers and employees embraced the software and are using it.  • Operational efficiency- Measure the improvements in the form of automated process, system reliability, and task completion speed.  • Customer retention- Analyzing subscription renewals, churn rates, and repeat purchases for custom software will reflect the improved user experience.  • IT and maintenance cost reduction- Evaluate the savings from reduced dependency on IT support and minimum infrastructure costs.  What are the effective practices to track custom software ROI? • Set achievable goals

4. Problem defining including SMART goal framework is important. Otherwise, the risk will emerge and it will waste budget and software will fail to deliver. Understanding pain points to address through the solution is imperative.  • Measure impact using analytics tools Data tracking is important and with the help of analytics tool you can have real-time insights on the software, its performance, and overall impact on your business. Checking the reviews will also let you know what is doing well and which areas need improvement.  • Seek user feedback for measuring qualitative metrics Analytics will detect the issues but not the causes behind them. User feedback will give you an insight to them through surveys, interviews, in-app feedback, support ticket, and session recordings. So, you can act accordingly. What are the advantages of using custom software development for businesses? In this section, we have highlighted the custom software benefitsfor your businesses.  • Efficiency gains

5. Each business comes with certain bottlenecks including outdated tools, slow processes, and manual tasks. Custom solution addresses all of them proving to be the ultimate game-changer for the business operation. All you need to do is to detect the issues and do better to improve the operation.  • Cost savings You may think that it is quite expensive but it is the long-term cost-cutting tool. While off-the-shelf software possesses both hidden and upfront costs; it has limited features, upfront subscription or license fees, per-user fees, and ineffectiveness.   With tailor-made solution, you can cut the additional costs and use of multiple third- party apps while improving efficiency, less human error, low maintenance cost, and optimized use of resource. The biggest perk is investment will keep paying off and savings will increase every year.  • Revenue growth With long-term ROI software developmentyou can not only cut the extra costs but also make more money. High-quality product reaches more customers increasing the fast sales. It will remove friction from sales, promoting customer experience and opening up the door of new revenue streams.  They will drive more revenue through increased conversions, better customer retention, new business models, attracting new customers, and speeding up sales. It will support and accelerate your growth.  Wrapping up Custom solution is ideal to transform the business and have a great ROI. But the question is how you are going to achieve that! Building a software and leveraging it in the proper manner is a job of experts.  Digital Aptech with 12+ years of experience can be your ideal companion in building a solution caters to your business. They have a dedicated team of custom software development to keep you stay ahead in the game.The robust and scalable solution will boost your productivity, generate more revenues to driven exponential growth. Check here https://digitalaptech.com/services/custom-software-development/