What is Custom Software Development? 7 Stages of a Custom Software Project

We live in a tech-driven world – one where software plays a powerful role. And in an increasingly competitive technological market, leading companies across all industries are increasingly investing in tailored solutions to maintain their competitive edge.  What is custom software development? Custom software development is the process of planning, designing, and creating tailored solutions […]

by Dilyan Dimitrov

July 30, 2023

6 min read

Custom software development man holding laptop

We live in a tech-driven world – one where software plays a powerful role. And in an increasingly competitive technological market, leading companies across all industries are increasingly investing in tailored solutions to maintain their competitive edge. 

What is custom software development?

Custom software development is the process of planning, designing, and creating tailored solutions – either in-house or by a third-party developer. Unlike commercial off-the-shelf(COTS) software, custom applications are designed to target specific business needs or fit into a particular operation. These solutions can be anything, from resource management software to internal portals or CRMs.

The practice comes with a variety of benefits, which explains its popularity. The global custom software development market has a projected 22.4% compound annual growth rate between now and 2030.

But what is the custom software development lifecycle? What goes on behind the curtain, and how does such a personalized piece of software come to be?

Key stages in custom software development 

Requirement gathering 

This is the very first stage of the process, where your software development partner meets with you for a consultation. The requirement-gathering process usually involves several meetings between you and your software development services provider. 

It’s a chance to establish a common language with the people working on your project. Everyone involved can learn your goals, specifications, what you need the software to do, and who will be using it. 

Analysis and Planning 

Laying a stable foundation is critical for the success of a custom application. 

In the planning stage, a custom software development company assesses project scope, looking at different objectives and their feasibility. The development team creates a concrete, actionable roadmap. It outlines the solution’s appearance, features and functionality, architecture needs, and more. 

This is the stage where you’re setting the tone for the entire project, and open two-way communication between engineers and stakeholders is crucial. Both sides of the project need to work together to iron out milestones, timelines and budget considerations. 

System Design 

Once the software developers know what they need to create, they need to decide how to do it. This stage is where all the abstract concepts and ideas discussed so far start taking shape. 

The backbone of system design revolves around architecturing your software solution. Senior software engineers and architects work together to define the software’s architecture type, components, and modules. They determine how data will flow and how parts of the system will interact. 

This is also the stage where UI/UX design happens. While engineers are creating the technical scaffolding for the solution, designers are mapping out the visual layout for your responsive software application. 


This is the main, and longest, stage of developing a custom solution. Developers collaborate with designers and product owners to create the infrastructure, write code, and assemble the web application, following everything discussed in previous stages. 

The minutiae here may vary depending on which software development model your chosen partner follows. Most companies nowadays – including Dreamix – use the Agile methodology. Agile development typically involves daily Scrum meetings where developers discuss issues and report progress on their tasks. The work is divided into Sprints – fixed-length cycles dedicated to development. It’s an optimized, iterative approach to improve workflow and productivity. 


Before customised business software can be released, it undergoes a variety of tests to ensure it’s performing as needed. The timing of this step can vary depending on the development framework. In a traditional waterfall model, it happens after the development stage. In Agile software development, however, testing happens iteratively throughout the project, in parallel with development. 

There are several main types of tests: 

  • Internal testing: The development team performs tests internally to check if the solution works correctly within the development environment.
  • Integration testing: Integration tests aim to verify that the different components of the software work together seamlessly.
  • User acceptance tests: This involves testing the solution from the perspective of an end-user.

Most bespoke software development companies use automated testing to streamline and optimize the testing process. Such tools can quickly execute a series of predefined tests and identify potential issues, which means the developers can address glitches more quickly. 


After successful testing and when all errors have been eliminated, it’s time to deploy. This is when the end-users get to fully experience your software solution for the first time and provide feedback. 


This step depends on your choice of software development provider and whether they offer post-launch support. Quality partners usually do. 

During deployment, developers and designers collect data and feedback from users. They can use that data to implement minor fixes and user experience improvements. 

When Should You Consider Custom Software? 

Businesses choose custom software development for a variety of reasons. If you’re deciding between a custom solution and off-the-shelf software, check if any of the following applies to you: 

You can’t find a solution that does exactly what you need

This is the most obvious reason for considering custom software development. If you’re having trouble finding a pre-made solution that offers the business functions you need, it’s probably time to have one tailor-made. 

You’re in a heavily regulated industry

Regulations can be difficult to meet, and the penalties for not meeting them can be severe. If existing software doesn’t live up to regulatory requirements, there isn’t much you can do. You might need to commission a solution that’s designed with those requirements in mind. 

You’re concerned about integrating with other systems 

Most companies today run upwards of several dozen systems at once. Sometimes, a solution might solve specific business challenges but won’t work well with other internal or third-party systems you use. In such cases, you can go with a custom solution that offers the same functionality and integrates well with your existing operation. 

You plan on growing in the future

Not all software is scalable. If you’re planning on increasing the workload a business application needs to handle, having it designed for scalability might be a sound investment. 

Additional Tips

There are some things you can do to make sure your software projects as seamless as possible. 

Pick the right custom software development provider 

Your choice of partner can be crucial for the success of your project. 

Look for a partner with a proven track record, preferably with some software development projects similar to your own. Evaluate their technical expertise and look into their tech stack: do they use the programming languages you need? Last but not least, monitor the way they communicate with you during the initial get-to-know process. Transparency is key in this industry, and a partner that keeps you in the loop can make the development process much easier. 

Set clear expectations from the beginning 

Being upfront about your expectations, and aligning goals with your provider, can save you a lot of hassle and unnecessary misunderstandings. Establish objectives and agree on reasonable timelines, outline the project’s scope and go over all requirements. Agree on communication protocols, reporting frequency and how to proceed when issues arise. All of that will ensure your project progresses as smoothly as possible. 

Wrap Up

Custom software development is a complex process that needs to be carefully planned and carried out. Understanding the different phases and what they entail shows you what to expect at every step of the way. With that knowledge, and with the right software provider by your side, your software development projects have a much larger chance of success. 

A reader who loves writing, a marketer who loves tech, a nerd who loves sports. Dilyan, our resident writer, half-jokes that his days are filled with everything you can think of - except free time. He joined our team several years into his copywriting career - and he seems to feel at home here. Because, as he puts it, “there’s always cake at the office”.  If he doesn’t have his nose buried in a book, you can typically find Dilyan writing his latest piece, tinkering with his PC, or off swimming/cycling somewhere.