Three different quotes: agency, freelancer, and software house — what is a software house and when does it make sense?

Put these three criteria on the table before making a call: 1) Financial error risk: If the system calculates wrong dimensions or pricing, who covers the financial loss? 2) Long-term vision: Will this portal evolve into your company's core production software in 2 years? 3) Vendor independence: If you part ways with the dev team, will you have complete technical documentation that another company can easily understand? If those points are critical to you, going with a software house is practically unavoidable.

Two years ago, we paid 4,000 EUR to a freelancer for a similar calculation tool. The system worked, but then the guy who built it took a full-time corporate job and abandoned the project. Since there was no documentation, no one could even handle a simple tax update in the code. In the end, we had to shell out 11,000 EUR to a software house to rebuild it from scratch; the initial budget was completely wasted.

Quotes from corporate software houses don't always mean flawless engineering. There are plenty of companies that bill you 13,500 EUR do the analysis phase, and then pass the actual coding off to interns or cheap outsourced contractors. Make sure your contract explicitly states the seniority level of the engineers who will actually be developing the project and who you'll be having sprint meetings with.

agencies are great at showcase websites but once complex databases and formulas get involved they mostly just try to patch things together with plugins. freelancers work alone so they can easily vanish if they get sick or swamped. if your budget allows for it, a software house will give you peace of mind.

How much is the software house quoting for monthly post-launch SLA support and maintenance fees? These types of companies usually pitch a monthly maintenance agreement after delivery; did you factor these potential operating expenses into your budget alongside the initial setup cost?

We initially had our design agency build our logistics portal. The interface looked amazing, but the moment 15 users tried to approve orders at the same time the database locked up. That's because the agency approached it with an e-commerce mindset. In the end, we had to hire a software company to rebuild the entire architecture from scratch, and that was the only way it got resolved.

if we partner with a software house do we directly own the code that gets written? if we stop working with them down the road can we hand the project over to another company and keep developing it?

Settle the source code ownership right from the start. The contract must state that full repository access and intellectual property rights will be unconditionally transferred to your company. Whichever vendor you go with, do not make any lump-sum payments beyond the upfront deposit without a proper code delivery protocol in place.

I completely agree. The real issue isn't the number, but what it's based on.

Thanks for writing this, that's the right way. Hasty decisions become decisions you have to fix six months later.

When you try to change everything at once, nothing settles. Just leaving this note, it might be useful.

Don't miss this: Mistakes made on the what is a software house side are usually reversible but expensive.

If you don't write this down from the start, it leads to arguments later.

The answer above hits the nail on the head. Just because everyone does it doesn't mean it's right.

Trying to do this alone is the most expensive way. Just leaving this note, it might be useful.

I agree.

Here's how it went for us. If scope grows, either time or budget must grow. There is no third option.

Just leaving this note, it might be useful.

I partly agree, partly disagree. People defend habits, not processes. Resistance comes from there.

Every "we'll look at it later" in a meeting means unbilled work. Of course, it varies if your situation is different.

I'd say don't rush. Start with a small trial; don't commit to everything at once.

I've been down this road let me tell you. When you try to change everything at once nothing settles.

Thats all sorry if I went on too long.

I've been dealing with this for a long time. The biggest time-waster for us was not knowing who had the final say.

Payment schedules should be tied to project phases, not calendar dates. Hope this helps.