Custom software development costs range from $30,000 for a focused MVP to $500,000+ for a complex enterprise platform. The most common B2B projects — operational platforms, internal tools, SaaS products — land between $80,000 and $300,000 total. Ongoing development engagements typically run $8,000–$25,000/month depending on team size and geography.
The cost of getting it wrong — building the wrong thing, choosing the wrong team, or underestimating integration complexity — consistently exceeds the cost of getting it right the first time.
Cost by project type
These ranges assume a nearshore LATAM team with senior-level engineers. Onshore US teams run 40–80% higher for the same scope.
Cost by team model
Where your development team is located is one of the biggest levers on total cost. Here's an honest comparison:
Onshore (US-based)
Rate: $150–$250/hour. Monthly team cost: $50k–$100k+
Strongest for: US-only compliance requirements, highly regulated industries, teams where proximity to stakeholders is operationally necessary.
Tradeoffs: Highest cost. Tight talent market means slower hiring. Best for companies where the software is the product and speed and quality are the primary concerns, not cost.
Nearshore LATAM (Colombia, Mexico, Argentina)
Rate: $60–$120/hour. Monthly team cost: $20k–$45k
Strongest for: US companies building operational software, B2B SaaS, and internal platforms. Time zones overlap with US (EST/CST/PST). Strong English proficiency. Cultural alignment with US business norms.
Tradeoffs: Slightly harder to evaluate quality upfront — you need to assess communication and product thinking, not just technical skills. Remote-first, but close enough for quarterly visits if needed.
KODIA operates as a nearshore LATAM team — engineers and product leads based in Colombia, serving US clients. Engagements start at $8,000/month.
Offshore (India, Eastern Europe, Southeast Asia)
Rate: $30–$70/hour. Monthly team cost: $10k–$25k
Strongest for: Large codebases with well-defined specs, low-context work, teams with strong internal PM capacity to manage the coordination overhead.
Tradeoffs: Time zone gaps (8–13 hours) create async-only workflows that slow iteration cycles. Communication overhead often erodes the cost savings. Works best when specifications are airtight and the work is execution-heavy, not design-heavy.
What drives cost up
Scope ambiguity. Vague requirements produce scope creep. A feature that starts as "users can export data" expands into "customizable export templates with scheduling and email delivery." Define scope precisely before contracting.
Integrations. Every external system integration adds 2–6 weeks of work. "It just needs to connect with our CRM" is almost never a small task. CRM APIs have rate limits, data model mismatches, and authentication edge cases. Budget integrations explicitly.
Compliance and security requirements. HIPAA, SOC 2, PCI-DSS, or enterprise security reviews add engineering overhead. If you're in a regulated industry, budget 20–40% extra for compliance.
Changing requirements mid-build. Pivoting the scope after development starts is the most expensive thing you can do. A requirements change in week 8 of a 16-week project typically costs as much as the original scope of those features.
Wrong team for the job. A team without product experience will build exactly what you spec, even if what you spec is wrong. The cost of rebuilding after launch exceeds the cost of finding the right team upfront.
What drives cost down
Clear scope before contracting. A 2-week discovery and scoping phase adds $5k–$15k but consistently reduces total project cost by 20–40% through avoided rework.
Ruthless MVP discipline. Every feature you defer to phase two cuts time and cost now. Most features added before launch don't survive contact with real users anyway.
Nearshore over onshore for non-regulated work. The same engineering quality at 50–60% of the cost, with overlapping working hours and strong communication.
AI-accelerated development. Teams using Cursor, GitHub Copilot, and Claude for code generation ship routine implementation 30–50% faster. This is now table stakes for any serious development team — verify your partner uses these tools.
Iterative delivery with real user feedback. Shipping working slices every 2–3 weeks and validating with users means you stop building wrong things early. The alternative — 6 months of heads-down development before a user sees anything — is the highest-risk approach to software development.
KODIA's model
KODIA builds custom software on a monthly engagement model starting at $8,000/month. This includes product thinking, engineering, and delivery — not just code execution.
Typical engagement structure:
- Focused web app or MVP: 3–6 months, $24k–$48k total
- B2B operational platform: 6–12 months, $48k–$96k+ total
- Ongoing product development: Monthly retainer with defined deliverables
KODIA doesn't estimate hours and bill against them. Engagements are milestone-based — you know what ships and when. Initial scope assessment is part of every discovery call.
For companies at the "should we build this?" stage: KODIA also offers an Agent-Ready Audit that maps your operational workflows before you commit to a build — often the fastest path to knowing whether custom software is the right investment.
When custom software is actually worth it
Custom software makes financial sense when:
- Your core competitive advantage lives in how you operate, and generic tools can't model it
- You're spending $5k+/month on manual workarounds or spreadsheet labor that software would eliminate
- A specific integration or workflow is causing measurable operational drag
- You're growing past what a SaaS product can handle at your level of complexity
It's not worth it when a SaaS product covers 80% of your needs and the 20% gap is an edge case, when your requirements aren't defined well enough to scope a build, or when the team deploying it isn't ready to adopt it.
Explore custom software development at KODIA — or start with a discovery call to scope your specific situation.
Frequently asked questions
How much does a custom web application cost?
A focused custom web application — 1–2 core user flows, basic integrations — runs $30,000–$70,000 with a nearshore team. More complex B2B platforms with multiple roles and integrations: $80,000–$200,000. Onshore US teams run 40–80% higher for the same scope. Timeline: 8–24 weeks depending on complexity.
Why is custom software development so expensive?
Custom software requires product design, engineering architecture, implementation, testing, integration work, and deployment — all scoped specifically to your business. Unlike SaaS (where costs are amortized across thousands of users), you're paying for the full cost of building something unique. The cost reflects real senior engineering time, not a markup on commodity work.
Is nearshore software development cheaper than onshore?
Yes, significantly. US onshore teams bill $150–250/hour; nearshore LATAM teams bill $60–120/hour for comparable quality. The practical difference: a 6-month project that costs $120k–$180k onshore costs $50k–$80k nearshore. Time zones overlap with the US, communication is strong, and cultural alignment is high. It's the highest-value option for most B2B custom software projects.
How long does custom software development take?
A focused MVP: 8–12 weeks. A B2B operational platform: 12–24 weeks. A complex SaaS product: 4–8 months. Enterprise platforms: 6–18 months. The single biggest driver of timeline is scope clarity — vague requirements add weeks before a line of code is written.
What's included in a custom software development engagement at KODIA?
KODIA's engagements include product strategy, architecture design, engineering, integrations, testing, deployment, and documentation. Engagements start at $8,000/month on a monthly model with defined milestones. Initial scope assessment is done during the discovery call — no commitment required to understand what your project would cost.