What does KSA charge for custom software development?

• $100 per hour
• We work on a time and materials basis
• We bill our projects weekly
• Clients who spend more than 40K per year receive volume discounts

Why do we charge that amount?

In general, you are paying about $10 per hour for each year of experience. Also, there are several types of local providers in our field that you should evaluate:

• In house staff
• Part time freelancers
• Professional developers and freelancers
• Software development companies
• Contract to hire

In house staff require a significant amount of overhead, investment and risk. Ads must be placed, applicants screened and interviewed. Office space, equipment, software and licenses must be allocated or purchased. Training, orientation and integration into your company's culture must occur. If the employee works out, there are still benefits to be awarded. Studies have shown that in house staff achieve only about 70% productivity during the workday due to social commitments, ability to focus and attendance at meetings. For a good developer, expect to pay $45 to $55 per hour plus benefits.

Part time freelancers are a valid risk vs. reward option. Generally, they already have a full time job which is their number one priority, but also enjoy the benefits of side work. Examples would be the ability to work on software outside their current expertise, additional income to pay for expenses, hobbies, etc., and also the ability to cover any gaps in employment. The risks for hiring them include availability (long term, during regular business hours, etc.), meeting deadlines and experience. If the developer has a strong background in the technology or field of business expertise you need, the rewards may be worth the risk. Expect to pay anywhere from $45 to $65 per hour.

Professional developers or freelancers bring a unique set of skills and experiences to every project. Usually, those attributes are hard fought and hard won due to the variety of projects and customers they have worked with over time. You should expect that they will be able to communicate effectively and professionally. The depth and scope of their projects should bring confidence to mind immediately. Freelancers typically work with very little overhead to keep their expenses and hourly rates down. For a professional software developer, expect to pay $85 to $100 per billable hour.

Software development companies, with many developers on staff, have two big benefits. One, there is always someone to answer the phone when you call during an emergency. Two, a succession plan is in place if your assigned developer is on vacation or leaves the company itself. The downsides are many. You will pay for their overhead and you will see it in the rate. If a developer is "on the bench" (i.e. not currently billable), someone has to pay for that. When your project is approved, you may be assigned a developer from the bench. A developer who is on the bench, is either new to the company, not good at retaining clients and may not have the experience you specifically need for your project. Someone has to manage that developer, manage your account and pay the rent, so you'll pay for that too. By the time you are ready to complain about your service, which one of those people will you call? Expect to pay upwards of $120 per hour.

Contract to hire firms are generally not interested in small accounts because 1 contracting position (for a 3 month minimum or 500 hour contract) is not going to lead to 10 more staffers in the next 18-36 months. Expect to pay rates similar to software development companies or a one time fee for placement (typically 15%-25% of the entire contract).