Custom software development can transform your business, solving inefficiencies, integrating systems, or scaling operations in ways off-the-shelf solutions simply can’t. But here’s the rub: many companies don’t plan for custom software projects in their annual budgets.
This isn’t surprising—custom software often arises as a solution to unexpected challenges, like incompatible tools, inefficient workflows, or the sudden need for a unique competitive edge. So, what do you do when your business needs custom software but there’s no explicit budget for it?
Here are practical strategies to help you fund your custom software development project and tips to ensure you’re budgeting smartly for success.
1. Pull Budget From Benefiting Departments
Custom software often benefits multiple teams and departments—sales, marketing, IT, customer service, and more. Rather than placing the financial burden solely on your IT budget, consider redistributing costs across the departments that will see the most impact.
For example:
- Marketing benefits from better analytics tools.
- Sales gains from CRM improvements or integrations.
- Operations streamlines workflows and reduces inefficiencies.
By shaving a small amount from each relevant department’s budget, you can reduce the financial strain on any single team while collectively funding a tool that improves overall performance.
Tip: If the solution will replace current systems or tools with recurring fees, factor those savings into your department funding requests.
2. Evaluate Existing Projects and Reallocate Funds
Sometimes, funding a custom software project is as simple as reprioritizing your current initiatives. If there are projects or tools that are no longer as relevant—or can be delayed—redirect those resources to your custom software development.
Key Questions to Ask:
- Are there projects that won’t deliver as much value as expected?
- Can you delay less urgent initiatives to free up funds?
- Are there overlapping or redundant tools that can be consolidated?
Custom software often delivers measurable ROI, so a shift in priorities might yield greater value in the long run.
3. Secure Executive Buy-In With a Business Case
Getting leadership on board is crucial when the budget isn’t pre-approved. Build a strong business case that highlights:
- The Problem: Define the inefficiency, incompatibility, or challenge the software will solve.
- The Impact: Show how it will save time, reduce costs, or drive revenue.
- The ROI: Calculate the potential return on investment (more on that below).
Executives need to see the bigger picture. If you can show how the custom software will benefit the business as a whole, you’re more likely to secure funding.
Tip: Focus on the long-term impact. Custom software is an investment that can lead to significant savings or revenue gains over time.
4. Budget Smartly: Understand Custom Software Costs
Unlike off-the-shelf tools with fixed pricing, custom software costs can vary significantly based on scope, complexity, and features. Here are the key cost factors to consider:
- Size of the Project: Small projects with limited features will cost less than enterprise-level solutions with extensive functionality.
- Development Time: Custom software takes time to build, test, and refine. The longer the timeline, the higher the cost.
- Features and Complexity: Advanced features (e.g., AI, real-time analytics, or complex integrations) will add to your budget.
- Team Size and Expertise: Larger teams or highly specialized developers can increase costs.
Tip: If you’re unsure about cost specifics, reach out to a custom software development company like Prominent for a tailored quote.
5. Plan for Flexibility: Software Roadmapping
Custom software development isn’t always a “set-it-and-forget-it” expense. Unexpected challenges, feature changes, and user feedback can all influence the final cost.
That’s where Software Roadmapping comes in. This process creates a strategic plan for your project, helping you:
- Prioritize essential features.
- Identify potential risks or unknowns.
- Build a phased approach that fits your budget.
With a clear roadmap, you’ll avoid overspending on unnecessary features while ensuring you allocate enough to meet your business needs.
6. Calculate ROI: Show How the Software Pays for Itself
Funding a custom software project is easier when you can show that the solution will deliver measurable returns.
Here’s how to calculate ROI:
- Revenue Gains: Will the software help you increase sales or attract more customers?
- Cost Savings: How much time, labor, or inefficiency will the software eliminate?
- Risk Mitigation: Will it reduce downtime, improve compliance, or prevent costly errors?
Example: If custom software saves your team 20 hours a week in manual processes, and your average hourly labor cost is $30, you’re looking at $31,200 in annual savings—just in labor alone!
7. Work With a Trusted Development Partner (or Client)
If you’re overwhelmed by the process of budgeting for custom software, don’t go it alone. A trusted development partner like Prominent can guide you through every step, from initial estimates to ongoing adjustments.
We specialize in Software Roadmapping, helping you align your goals and budget with the right features, technologies, and timelines. Our team takes a transparent, relationship-focused approach, ensuring you get the best value for your investment.
Keep in mind that this “partner” could even be your customers themselves. Some customers are willing to help fund solutions or new features in a solution if there is a large benefit to them or their project.
Ready to Fund Your Project?
Custom software development is a big investment, but it doesn’t have to break your budget. By pulling resources from benefiting departments, planning strategically, and focusing on ROI, you can fund the solution your business needs—even if it wasn’t part of your original budget.
If you’re ready to explore your options, contact us today to get started. Our team is here to help you bring your ideas to life without the financial guesswork.
