Companies of all sizes invest in custom software solutions to increase efficiency and productivity, introduce new business units, and increase innovation to remain competitive in today’s market.

How much does it actually cost to develop custom software, and can your business afford it? Should you employ a freelancer or a local small consulting firm? Or perhaps you should take the “secure” route and employ a colossus. (No one has ever been dismissed for employing IBM, correct?) However, can your company afford its exorbitant hourly rates?

When employing a software development company, there are many options and a wide range of pricing and terms.

Companies offering custom software services

A Small Class software developer could be an excellent choice if you have a modest undertaking or are on a tight budget. And if you discover the right company, you can accomplish outstanding results at a fraction of the cost of a Large Business or Enterprise Class software development firm.

However, because they are lesser businesses, you must ensure they can handle a project of your scale. Double-check their references and request examples of similar-sized and -scoped projects completed successfully. Also, attempt to determine the company’s financial stability. Several of these small consultancies have gone bankrupt amid projects, ran out of money, had to lay off employees, or failed to complete projects and could not repay deposits because the money had already been spent.

Freelance Developers

If you have a modest project that can be completed by an individual and does not require teamwork, employing a freelance software developer is a viable option.

There are typically two types of freelancers: the recent graduate of a development boot camp and the former 9-to-5 employee who grew weary of the rat race and decided to set out independently.

‍Newbies

Typically, novice freelancers are enthusiastic and enthusiastic about their newly acquired skills and are prepared to accept nearly any job at any rate.

The finest of them can occasionally be quite competent in their experience. However, they frequently fail to recognize their ignorance and overestimate their abilities, causing them to overpromise and underdeliver.

For assignments ranging in size from $1,000 to $50,000, you can anticipate paying an inexperienced freelancer $50 to $75 per hour.

‍Experts with extensive experience

The expert has extensive experience developing software, is proficient in six programming languages, and has worked on dozens of custom software projects.

They will typically charge a premium for their time, typically between $100 and $300 per hour, for assignments ranging from $5,000 to $100,000 in size.

Pros of employing a free agent.

You can save money.
On websites such as Upwork, you can sort out the hub of freelancers.

Cons of employing a free agent

They are typically only proficient in one area, such as front-end development, back-end development, design, etc. But for your endeavor to be successful, they will likely need to be proficient in all areas.
They tend to become tired and abandon initiatives. Finding someone to complete their unfinished undertaking will be difficult.
It is dangerous because there is no recourse. Certainly, you signed a NDA contract, and if things go awry, you could sue them. They are unlikely to be insured and may or may not be able to pay if you prevail.
They could vanish. Our clients have in the past worked with freelancers who disappeared with the code, never to be heard from again.

Team Capacity

Many offshore software development companies frequently quote extremely low hourly rates but overstaff the project with redundant, extra resources.

Most projects require only a part-time project manager and a part-time quality assurance specialist but no business consultant. However, many offshore companies will staff five full-time employees regardless of the need to increase the overall project cost. Typical components of a personnel plan for a medium-sized undertaking include:

Front-end developer
Back-end developer
Managed business consulting projects
Quality assurance specialist

Consequently, the actual hourly rate, based on productive hours worked, is significantly higher than quoted.

The Correct Method for Hiring Offshore Teams

Following these guidelines makes it possible to use offshore/nearshore developers successfully on your project, despite the challenges enumerated above. Employ a consulting firm with US headquarters and offshore/nearshore offices. This will provide you with the quality and security of working with an onshore company and the cost savings of an offshore company.

Many offshore companies will claim to be domiciled in the United States, but most of their employees are located overseas. Verify that you will be communicating with US-based managers.

Locate a team with a technical head developer in the United States who supervises a team of nearshore developers. This blended strategy will address a number of the communication and quality issues that completely offshored teams confront. A project manager in the United States who will serve as your primary point of contact is also an asset.

Go nearshore as opposed to offshore. Nearshore personnel in Central and South America are in the same time zone as the United States, facilitating communication.