A detailed explanation of why the price of software is expensive?
In the past, when I worked at a software house, I met clients in various companies to offer applications, did presentations on the features in the application, after finishing proceeding to offer application prices, clients often stated that application prices were expensive.
Here’s an explanation of why the price of the application is expensive
Applications are abstract products, which we cannot physically hold and only appear on electronic media such as computer screens, tables, or mobile phones. Products that are usually given to clients are in the form of CD/DVD.
Applications are written using programming languages, and programmers are people who create applications.
To create an application for enterprises, the following is the flow / method of the System Development Life Cycle – SDLC commonly used:
- Planning – identify business problems, feasibility studies, project management
- Analysis – collect information, needs, requirements, definition documents
- Design – develop user specifications and software database networks
- Development – building technical architecture writing programs and creating databases
- Testing – Unity testing system testing, integration testing, User Acceptance Test (UAT)
- Implementation – user training, installation to production, documentation, system conversion
- Maintenance – evaluation, helpdesk
SDLC
In a large IT (Information Technology) company, the following is the composition of IT workers along with details of the minimum salary:
IT Manager – 10 million per month
Project Manager – 8 million per month
Analyst – 6 million per month
Designer – 5 million per month
Programmer – 5 million per month
Tester – 4 million per month
Implementor – 4 million per month
Network – 5 million per month
Database – 5 million per month
Helpdesk – 3 million per month
Note: million is normal in Indonesia as the currency very has more zero, 1$ = 14K IDR
The total is 55 million per month, this is only a salary expense, not including capital costs such as office rent, computer / laptop, desk, electricity, water, etc.
The duration of making one application depends on the complexity, to make it easier we assume the application is not too complex, so it takes 3 months, so our monthly costs are 3, 55 million x 3 = 165 million.
For small and medium-sized companies, the composition above can be changed to:
IT Manager – 10 million per month
Designer – 5 million per month
Programmer – 5 million per month
Network – 5 million per month
Programmer concurrently as Analyst, Tester, Implementor, Helpdesk, and Database
The composition is very dependent on the management of the company, it is not uncommon for only one programmer in one company to handle all IT tasks.
Let’s assume the company only hires one programmer specifically to create applications for the company. The programmer is paid 5 million, because only one person works to handle all IT work, the time for completing a simple inventory application is 6 months.
So the total cost for 6 months is 5 x 6 million = 30 million.
In addition to cost, there are other considerations: the proficiency of the programmer, whether the skill is junior, intermediate or expert, if it is still a junior, the processing time can be delayed.
All newly created applications almost certainly have many errors / bugs, so they must be constantly revised. Artificial applications will be stable if they have been used and run for at least 1 year.
From the explanation above, you can imagine the costs that must be incurred if the company has to make its own application.
Regarding various problems in building a computerized system, you can read the article Constraints of companies switching from manual to computer systems
