System development costs are determined by the number of functions built, the number of screens and documents, connections with other services, the number of users, and the scope of maintenance after launch. Even systems with the same name can differ greatly in price depending on what they contain, so rather than judging by market-rate figures alone, learning to read the breakdown of a quote is the shortest route to knowing what a fair price is.
System development costs are determined by the scale of what's inside
When someone asks, "How much does a booking system cost?" there is no one-size-fits-all answer. Even among booking systems, one that only accepts reservations and one that also includes payments, email notifications, member management and LINE integration involve completely different amounts of work.
Five factors determine the cost:
- The number of functions and how complex each one is
- The number of screens and documents (invoices, listings, and so on)
- Connections with other services (accounting software, LINE, your website, payments, and so on)
- The number of users and how permissions are divided
- Maintenance after launch and the scope of revisions
Of these, items 3 and 5 are the ones most often overlooked. The more connections there are, the more work is needed to match the specifications of the other services. Maintenance becomes a monthly cost after launch, so if it is not included in the initial quote, the burden grows later on.
In our case, system development costs vary widely depending on the content, so we provide an individual quote.
Quotes are broken down by phase of work
System development quotes are generally written out phase by phase. The main items are shown in the table below.
| Item | Contents | What to look at |
|---|---|---|
| Requirements definition | Hearing what is to be built and documenting it | Is enough time allocated at the outset? |
| Design | Deciding the screens, how data is held, and how things behave | Will mock-ups of the screens be created for review? |
| Development | Writing the program | Is there a breakdown by function? |
| Testing | Verifying that it works | Is time for on-site verification included? |
| Data migration | Moving data from existing Excel files and the like | Are the targets and volume of the migration specified? |
| Launch and training | Releasing to the production environment and explaining how to use it | Is instruction on how to use it included? |
| Maintenance | Handling defects and making revisions after launch | Are the scope and the monthly cost specified? |
When you receive a quote, first check that all seven of these items are present. A quote that simply says "all-inclusive" tells you nothing about what is covered. Ask for an itemized breakdown.
Some quotes are written in units of person-months. A person-month is the amount of work one person does in one month. "Five person-months" means five months of work for one person. The amount is calculated from the unit price per person-month and the number of people, but comparing only the unit prices hides differences in efficiency and quality of the work.
There are two contract types: contract for work and quasi-mandate
There are two main types of contract for system development.
| Contract type | Details | Best suited for |
|---|---|---|
| Contract for work | You pay for delivery of a completed product | What is to be built is clearly defined |
| Quasi-mandate | You pay for the work itself; completion is not guaranteed | Deciding as you build, and continuing to improve |
With a contract for work, the amount and the deliverables are fixed, so you can forecast your budget. However, changing the specifications midway incurs additional costs. A quasi-mandate allows flexible responses to changes, but it is harder to fix the total cost at the outset.
The Ministry of Economy, Trade and Industry publishes the "Model Transaction and Contract Documents for Information Systems" as a template for system development contracts. They are a useful reference when checking contract types, the scope of responsibility, and the handling of deliverables. Reading through them before signing a contract makes the meaning of the items in a quote easier to understand.
Points to watch when comparing quotes
When obtaining quotes from several companies, check the following points.
- Are you comparing them under the same conditions for the scope of work?
- Are maintenance costs included?
- Are the conditions under which extra costs arise stated?
- Can you export your data and hand it over to another company?
- Who is in charge, and where is the point of contact?
Choosing the cheapest company can lead to the mistake of finding that necessary functions were not included. Ask the companies why the amounts differ. It is safest to choose a company whose explanation is specific and convincing.
To compare quotes, prepare a "one-page document summarizing your requirements" in advance so you can request quotes from each company under the same conditions. In it, write the challenge you want to solve, who will use the system, the functions you need, the services you want to connect to, and your preferred timing.
What you can do to keep costs down
Reducing functions is not the only way to keep system development costs down.
- Start with only the functions you need and add more as you use the system
- Use off-the-shelf services as they are wherever they are sufficient
- Review screen mock-ups early to reduce rework later
- Prioritize your requirements and decide what can be postponed
- Consult a company that uses AI for part of its development work
Item 3 in particular has a large effect. Realizing after completion that "this isn't what I pictured" means the cost rises because of the rework needed to fix it.
We use AI for part of our development work to keep both timelines and costs down.
Common mistakes with system development costs
Requesting a quote before your requirements are settled
If you request a quote while your requirements are still vague, the figures will vary widely. First write out your current workflow, sort out the issues, and then come and talk to us.
Looking only at the initial quote and not thinking about maintenance
Post-launch revisions, server fees and handling defects are monthly costs. Compare not just the development cost but the total over one to several years.
Changing the specifications repeatedly midway
Every change to the specifications adds extra cost. For areas likely to change, discuss how to structure the contract, such as proceeding under a quasi-mandate from the start or building in small increments.
Not involving the front line in reviewing the screens
Screens decided by the person in charge alone can turn out to be hard to use on the front line. Have the people who will use the system try them out before finalizing the specifications.
Not clarifying how a system built by another company will be handled
If you already have a system, the cost will differ depending on whether you rebuild it or modify it. We may be able to take on modifications to systems developed by other companies after reviewing the details.
How to judge
Here is how to think about costs for each approach.
| Situation | How to think about cost |
|---|---|
| What is to be built is clearly defined | Proceed under a contract for work with a fixed total amount |
| You want to decide as you build | Use a quasi-mandate and set the period and volume of work |
| You want to try it out on a small scale | Build just one function first, see the results, then expand |
| You already have a system | Get quotes for both modification and rebuilding and compare them |
| You want it linked with your website | Consult a single company that can handle the connections too |
Whichever approach you take, putting into words what is troubling you and what you want to achieve before requesting a quote will improve the accuracy of the figures.
An example of the one-page document to attach to your quote request
To request quotes from each company under the same conditions, summarize the following items on a single page.
| Item | Example of how to write it |
|---|---|
| The challenge you want to solve | Transcribing orders takes an hour every day |
| Who will use it | 5 sales staff, 2 administrative staff |
| Functions needed | Creating quotations, registering orders, issuing invoices |
| Services to connect to | Accounting software, email |
| Existing data | Excel order list (about 3 years' worth) |
| Preferred timing | We want to start using it at the beginning of the next fiscal year |
| Budget approach | The ceiling for initial costs and the amount available each month |
Please adapt this document using your own company's actual figures. Simply having such a document shortens the time spent on interviews and improves the accuracy of the quote.
What to ask after you receive a quote
Once you have the quote, put the following questions to the company.
- Under what circumstances would the amount change?
- Up to what point can specifications be changed free of charge?
- For how long after launch will defects be fixed free of charge?
- What happens to the handover if the person in charge changes?
- Can the program and data you build be handed over to another company in the future?
A company that gives specific answers and puts them in writing is one you can more easily trust.
What to agree on when working with a development company
Settling the rules for communication before the quoted amount is fixed reduces misunderstandings during development.
- Who will be the point of contact (one person on each side)
- How often progress will be reported
- The procedure for requesting changes to the specifications
FAQ
It varies greatly depending on the functions built, the number of screens, the connections, the number of users and the scope of maintenance. We provide a quote after hearing the details of your project.
Make a note of the challenge you want to solve, who will use the system, the functions you need, the services you want to connect to, and your preferred timing. If you have Excel files or forms you currently use, showing them to us will improve the accuracy.
There are server fees and maintenance costs for handling defects and making revisions. Please check the scope and amount of maintenance together with the development quote.
We use AI for part of our development work to keep timelines and costs down. Before launch, we verify operation and confirm that there are no problems.
We may be able to take this on after reviewing the details. Please start by telling us about your current situation.
Before the quote, talk to us about sorting out your challenges
System development costs are determined by functions, screens, connections, users and maintenance. If you are not sure where to start, you can begin simply by telling us which tasks are causing you trouble.
We handle everything from requirements definition through design, development and post-launch revisions.
