What drives the cost of custom software in Switzerland, and how the price is set

Custom software is built for one business and the way it works, so it has no list price. Its cost follows from what it has to do and from who builds it. This guide is for owners and managers of Swiss SMEs: what drives the cost, what makes a project cost more or less, how to compare two offers, and what you pay for after launch.

What drives the cost of custom software?

The work it takes, and the rate charged for that work. The work grows with every task the software covers, every kind of user, every system it connects to, the data it takes over and the testing that makes it reliable. Two companies can also charge different rates for the same work, so two offers for the same software can differ.

• What it has to do. Every task a person carries out in the software, from entering an order to approving it, needs its screens, its rules and its tests.
• Who uses it. Office staff, people on the road, your customers: each group with its own rights adds screens and checks.
• Connections. Every link to another system has to be built and tested. If you work with bexio or Abacus, see what connecting your software to them involves.
• Your data. Moving data out of spreadsheets or an old system is work of its own, as moving an Excel process into a web application explains.
• Rules and calculations. Prices, approvals, deadlines: the more rules, the more cases to test.
• Personal data. The Data Protection Act asks for data protection to be taken into account "from the planning stage" (Art. 7) and for data security appropriate to the risk (Art. 8). Software that holds sensitive personal data, such as data relating to health, needs more care and more testing than a list of orders.
• Design. A design made from scratch, with research and testing with users, takes more work than screens built from proven components.
• Every device. Web software runs in the browser on a computer, a tablet or a phone, so one piece of software serves them all.
• Tests and documentation. Tests that use the software from start to finish, and documentation, are part of a proper delivery, and part of the price.

If you are a founder planning a subscription product, our guide on what drives the cost of a SaaS MVP covers that case.

What makes a project cost more or less?

How many processes, users and connections it has, and how much is still open when the work starts. A small tool for one process inside your firm is a different job from a portal that your customers use and that is linked to your accounting. Two invented examples show the difference:

• Less work: holiday requests at a firm of twelve. Staff ask for their days off, a manager approves them, and everyone sees the team calendar. That is one process, two kinds of users and no connections.
• More work: an ordering portal at a wholesaler. Customers order at their own prices, the stock comes from the wholesaler's own system, and the invoices go to its accounting. That is several processes, three kinds of users, two connections and data to take over.

What raises the cost: a scope that is still open when the build starts, many rare cases handled in the software, a design made from scratch, and changes halfway through. What keeps it down: a first version that covers one process well, proven components for the screens, bought services for sign-in, payments and email, and rare cases handled by hand at first. Our guide on what an MVP should include shows how to choose what goes in first.

Fixed price or time and materials?

A fixed price sets the total for an agreed scope before the work starts. With time and materials, you pay for the hours worked and the total follows at the end; our comparison sets the two side by side.

How do you compare two offers?

Hold both against the same written scope. Then ask both the same questions: what is included, whether the price is fixed, how changes are priced, and what you receive at the end. A lower total may simply cover less.

• Do they cover the same scope? Each offer should say what the software will do, in words you understand. If one stays vague, ask before you compare prices.
• Is the price fixed? An estimate is not a fixed price. Where a firm price is agreed in a work contract, the Code of Obligations holds the contractor to it: the contractor "may not charge more even if the work entailed more labour or greater expense than predicted" (Art. 373). The same article makes an exception for extraordinary circumstances that could not be foreseen, and leaves it to a court.
• How are changes handled? Ask whether a change beyond the agreed scope is written down and priced before it is built.
• What is included? Design, a prototype you can try before the build, tests, documentation, the launch. Ask what each offer leaves out, such as moving your data.
• What do you receive at the end? Ask what the offer says about the code, the rights to it and the documentation. Our guide on who owns the code explains what Swiss law says.
• What happens after launch? Ask what running the software costs, and whether monitoring is offered as a service.

What do you pay for after launch?

Once it is live, software costs money to run: the services it runs on, updates to the tools it is built on, and checks that it works. Our article on software maintenance after launch explains what drives that cost.

How is the price set?

From what the software has to do. With us, it starts with your first message. Then we write down with you what your software has to do, or work from a document you already have, and you get a fixed price in a written offer. Nothing is built until you agree to it, and any change beyond the agreed scope is priced before it is built. Custom web software shows how a project runs with us.