How to choose a software development company in seven steps

It often starts like this: an operations manager has three tabs open with three software companies that all promise “bespoke solutions” and “close collaboration”. The websites look alike, the case studies are polished, and the only thing separating them is a gut feeling. Six months later the project is either live and saving hours every week, or it is late and twice the planned cost. The difference typically starts on the day the vendor is chosen.

The answer to how you choose a software company is a fixed process: describe the problem, give every candidate the same brief and score them against the same criteria. Then you compare proposals on substance and risk instead of slogans. Below is the seven-step framework, a weighted scoring table and a worked example with three proposals.

How do you choose a software development company? The seven-step framework

Step six is the one most people skip. Many companies read three proposals and pick the one that “feels right”. That gut feeling is useful, and it becomes far more reliable once you have written down what matters most to you before you see the prices. Otherwise the lowest price ends up carrying the most weight, whatever you said in the first meeting.

What should you prepare before contacting a software company?

A good brief is short, typically two pages. It needs to give the vendor enough to propose a solution and a price, and it needs to be identical for everyone. Use this list as a template and send it as an email or a two-page document.

• The problem in your own words, and what it costs today in hours, errors or lost revenue.
• Who the users are: customers, staff, administrators, partners, and roughly how many of each.
• The five to ten most important things the solution must do on day one.
• Systems it has to talk to, such as e-conomic, Dinero, MobilePay, MitID, PostNord or your ERP.
• Budget range and preferred launch date, and whether the date is fixed or flexible.
• Requirements for running it: who fixes bugs, who updates it, where the data lives.
• Who on your side makes decisions, and how much time they have each week.
• What you want answered: price, timeline, team, pricing model, ownership and running costs.

If you want to go a step further, we have a requirements specification template that builds on the same points. If you are unsure whether you need anything built at all, start with custom software vs off-the-shelf. That decision should be settled before you spend time on vendors.

Where do you find a good software company in Denmark?

The best candidates typically come from three places: recommendations from companies like yours, solutions you have used yourself and liked, and searches for the specific job, such as “customer portal with e-conomic”. Look for case studies that solve a problem like yours, and notice whether the case describes what the solution does for the business. Kirppu is a good example of how we describe our own work: we built stand booking, a renter panel and a label app, and the chain grew from one store to more than 30.

Freelancer, agency or in-house team?

The size of the vendor should fit the job. A skilled freelancer is excellent for a well-defined task, while a system with design, backend, integrations and running costs needs several skill sets and someone who can cover for illness and holidays. A large agency brings capacity, often with more layers between you and the people building. We compare the options in freelancer vs agency and in hiring a developer vs an agency.

Which questions should you ask a software company in the first meeting?

1. Who exactly will work on our project, and can we meet them?
2. Which solution you have built is most like ours, and what went wrong along the way?
3. How do you price: fixed price, hours or a mix, and what happens when things change?
4. What is not included in the price?
5. Who owns the code, the design files and the data, and when does ownership transfer?
6. Who owns the hosting account, the domain and the Apple and Google accounts?
7. How do we follow progress, and how often do we see something that works?
8. What do hosting, updates and support cost per month after launch?
9. What happens if we want to end the relationship, and what do we take with us?
10. Which two clients may we call?

The answer to question two often says the most. A company that can talk honestly about an integration that misbehaved, and what they did about it, has learned something. We have collected more than 20 questions with examples of good answers in questions to ask a web agency.

How do you compare proposals from three software companies? A scoring table

Here is a worked example. A service company with 20 employees wants a booking system with a customer portal and an e-conomic connection. Company A bids DKK 95,000 as an hourly estimate, company B DKK 240,000 at a fixed price, and company C DKK 160,000 at a fixed price. The business agrees the weights internally before opening the proposals and gives each company 1–5 points per criterion.

Company A is cheapest on paper, but its proposal is an hourly estimate with no cap, and code ownership is unclear. Company B is thorough and experienced, yet costs DKK 80,000 more than C for roughly the same scope. Company C wins because it scores consistently well on the points the business itself said mattered most. Notice that the table also gives you something to negotiate with: you can ask B to explain the price gap and ask C to strengthen its support offer.

The pricing model is a criterion in its own right. Hours can suit ongoing development, while a fixed price gives budget certainty on a scoped project. We cover the pros and cons in fixed price vs hourly billing. Whatever the model, you should be able to see what is included and what happens when you change your mind along the way. Because you will.

Which warning signs should make you choose a different software company?

• The salesperson cannot tell you who will build the solution.
• The proposal arrives without a single question about your brief.
• The price is far below the others and nobody can explain why.
• Hosting, domain or app store accounts are created in the vendor’s name.
• The code is written in a closed system that only the vendor can work in.
• There is no agreement on what hosting and updates cost after launch.
• References keep being postponed, or the only cases are from very different industries and sizes.
• You are asked to pay most of the price before you have seen anything working.

The proposal itself deserves a careful line-by-line read. In red flags in a software quote we go through twelve warning signs with examples of wording you can ask the vendor to clarify.

What should the contract with the software company include?

• Scope: the list of features and integrations included in the price.
• Price and payment schedule, ideally tied to deliveries you can see and test.
• Change process: how new requests are priced and approved.
• Ownership: code, design, data and accounts belong to you, and from when.
• Running costs: what the monthly price covers, response times and notice period.
• A data processing agreement if the vendor processes personal data on your behalf.
• Exit: what you receive, and in which format, if the relationship ends.

Ownership is the point most often forgotten, and the most expensive to fix afterwards. We have a full guide to who owns the code, with an exit checklist you can paste straight into the contract. If personal data is involved, also sort out the data processing agreement; if the legal side is unclear, ask a lawyer.

What does choosing the wrong software company cost?

The wrong choice rarely costs just the first invoice. It costs months in which staff are still working in spreadsheets, a new vendor who has to understand half-finished code, and often a second launch. What we see in practice when companies come to us after a stalled project is almost always the same pattern: unclear scope, no shared plan for running costs, and code sitting in the vendor’s accounts. The patterns are covered in why software projects fail.

How we work at Ceptiv

We are one senior team in Copenhagen with design and development under one roof, and we build in React, Next.js, TypeScript and React Native, which many developers can pick up and continue. We give a fixed price and a written proposal within 24 hours, you own the code and data, and you follow the project in our client panel. Have a look at our portfolio, and use us as the proposal you hold the others against.

If you already have a brief, send it to us and you will have a fixed-price proposal the next day. If you want to see the level first, our packages are under pricing.