Once you decide to build custom software, the factor that most affects the project's success is how the process is managed. Choosing the right working model, preparing a complete contract and keeping up regular communication throughout the project go a long way toward preventing budget overruns, delays and post-delivery disputes.
In this article, we cover the working models used in custom software projects, the clauses a contract should include and the delivery process. If you are looking for what custom software is and how it differs from off-the-shelf software, you can start with our guide on what custom software is.
Working Models in Custom Software Projects
When working with software companies, one of three models is usually used:
Fixed Price
The scope, timeline and fee are determined at the start of the project. The budget is predictable; however, the scope needs to be written in detail, and any new requirements that emerge during the project are covered by an additional quote.
Time and Materials
Billing is based on the working time spent. Because priorities can be reassessed at every stage, it offers flexibility for products whose scope is not yet clear. Regular reporting and spending limits are important for budget control.
Dedicated Team
The software company allocates a fixed team to the business for a set period. It suits long-running, continuously evolving systems; the responsibility for product management and prioritization lies mainly with the business.
| Criteria | Fixed price | Time and materials | Dedicated team |
|---|---|---|---|
| Scope flexibility | Low; changes are made through an additional quote | High; priorities are updated at every stage | High; the team works according to the business's priorities |
| Budget predictability | High | Medium; depends on the time spent | Fixed monthly cost |
| Who bears most of the risk | The software company | Shared | The business |
| Suitable project | Small and medium-sized projects with a clear scope | Products whose scope will become clearer over time | Long-running, continuously evolving systems |
In practice, the models can be combined: the analysis and the first release can be done at a fixed price, and subsequent development can continue under the time-and-materials model.
What a Contract Must Include
A software contract should clearly define not only the fee and the delivery date, but also the responsibilities of both parties:
- Scope document and acceptance criteria: Which screens and features will be developed, and under what conditions each will be considered complete.
- Timeline and milestone payments: Tying payments to completed and accepted stages.
- Source code and intellectual property: Who will own the source code and how it will be delivered.
- Third-party licenses: The license terms and costs of the off-the-shelf components and services used.
- Warranty and maintenance: The free bug-fix period after launch, the scope of maintenance and response times.
- Confidentiality and personal data: Confidentiality obligations and data processing responsibilities under KVKK.
- Change request process: How out-of-scope requests will be evaluated and priced.
- End-of-project deliverables: Documentation, server and service access, and the transfer of domain names and accounts.
Communication and Reporting Throughout the Project
In custom software projects, most problems are not technical but related to communication. For a healthy process:
- A single person with decision-making authority (the product owner) is designated on the business side.
- Development generally proceeds in two-week stages, and working software is demonstrated at the end of each stage.
- Tasks, priorities and open questions are tracked on a shared board that everyone can access.
- Short weekly status reports keep the timeline, budget and risks visible.
Acceptance Testing and Delivery
Before the software goes live, the business's own users run acceptance tests with real-world scenarios. A test environment separate from the production environment is prepared for this testing. Bugs found are classified by severity: critical bugs are fixed before launch, while minor improvements can be planned for the next release.
Along with delivery, make sure that the source code, installation and user documentation and all access credentials are transferred to the business.
Common Mistakes That Put a Project at Risk
- Starting development without putting the scope in writing
- Leaving decisions unclear across multiple people
- Wanting every feature in the first release
- Leaving user testing until the end of the project
- Launching without a maintenance and update plan
- Closing the project without receiving the source code and access credentials
Frequently Asked Questions
How are additional requests priced in a fixed-price project?
Out-of-scope requests are treated as change requests; they are developed after their impact, timeline and cost have been confirmed in writing.
What happens if the scope changes during the project?
In the fixed-price model, changes are made through an additional quote. In the time-and-materials model, priorities are updated and the impact on the budget and timeline is reported.
Is maintenance mandatory after the software is delivered?
It is not mandatory, but it is recommended. Operating system, browser and library updates, along with security patches, require regular maintenance to keep the software secure and functional.
Which working model is more cost-effective?
Fixed price is generally more efficient for small projects with a clear scope, and time and materials for products whose scope will become clearer over time. The right model should be chosen based on the level of uncertainty in the project.
Conclusion
The success of a custom software project is determined by the right working model, a complete contract and regular communication. For the questions to answer before starting a project, take a look at our 12-question checklist, and for an estimated budget, try our cost calculator.
To plan your project together, you can have a free initial consultation with our custom software development team.
