The True Cost of Bad Software: Why Cheap Development Costs More

We've inherited dozens of projects over 15 years. Applications that were rushed to market and never properly maintained. Systems built by the cheapest bidder whose developers are long gone. Codebases so fragile that adding a new feature risks breaking three others.

In every case, the initial savings from cheap development were dwarfed by what came after.

This article is about the real, quantifiable cost of bad software — because most organisations don't account for it properly until they're already paying it.

Defining Bad Software

Bad software isn't just software that crashes or has bugs. It includes:

• Software that works but is expensive to change (high technical debt)
• Software that works but can't scale (performance cliffs)
• Software that works but is vulnerable to security threats
• Software that works but nobody uses properly (poor UX, no adoption)
• Software that delivers some value but far less than it should (poor requirements definition)

The most insidious category is the second: software that appears to work fine but is structurally compromised. This is what typically gets inherited after a cheap build.

The Five Hidden Costs of Bad Software

1. Ongoing Maintenance Overhead

Well-written software costs approximately 15–20% of its build cost per year to maintain. Poorly written software costs 40–70% per year — sometimes more.

Why? Because every bug fix requires understanding a system that isn't clearly written. Every new feature requires working around design decisions that were made poorly. Every infrastructure upgrade is complicated by dependencies that weren't managed.

A system that cost £60,000 to build well might cost £10,000/year to maintain. The same functionality built badly for £30,000 might cost £18,000/year to keep alive — and the maintenance cost grows every year as the debt accumulates.

2. Lost Developer Productivity

The most expensive thing in software development is developer time. Bad software consumes enormous quantities of it unproductively.

A study by McKinsey found that developers spend 25–40% of their time dealing with technical debt in mature software products. If your development team costs £200,000/year, that's £50,000–£80,000 of annual cost being spent dealing with problems that should have been prevented.

This also has a talent retention dimension: good developers leave organisations with bad codebases. They vote with their feet for clean, well-maintained systems. The resulting hiring and onboarding costs are rarely attributed to the original software decisions that caused them.

3. Business Agility Cost

Perhaps the most significant cost of bad software is the opportunity cost of slow delivery. When adding a feature takes 6 weeks because the codebase is fragile, you're losing competitive advantage every sprint.

We've seen organisations where a simple UI change — moving a button, changing a workflow — takes three weeks because of cascading dependencies in an unmaintained system. Their competitors, with better-built products, ship the same change in two days.

The compounding effect over years is severe. Organisations with high technical debt often find themselves in a 'frozen product' trap: they can barely maintain what they have, let alone innovate.

4. Security Incidents

Software built without security practices is not a question of if it will be compromised but when. The cost of a security incident includes:

• Incident response and forensic investigation: £20,000–£100,000
• ICO fines for GDPR breaches: up to 4% of global annual turnover (up to £17.5m under UK GDPR)
• Reputational damage and customer churn
• Legal costs and potential litigation
• System remediation and hardening

Software built with security-first practices — input validation, parameterised queries, proper authentication, secrets management — costs more upfront but is categorically different in risk profile.

5. The Rebuild Cost

When software reaches the end of its maintainable life, the only option is a full rebuild. And rebuilds almost always cost more than building it right the first time, for several reasons:

1. The new system must match the functionality of the old one, which takes time to document and understand
2. Users have adapted their workflows to workarounds in the bad system, creating undocumented requirements
3. Data migration from a poorly structured old database is expensive and error-prone
4. Running both old and new systems in parallel during transition is costly
5. Organisational trust has been damaged, leading to more scrutiny and approval overhead

In our experience, rebuilds typically cost 150–250% of what a properly built original would have cost. The tragedy is that this premium was entirely avoidable.

The Real-World Arithmetic

Let's put numbers on a typical case:

The cheap option costs £215,000 more over five years. This is why experienced buyers don't choose the cheapest quote.

How to Avoid Bad Software

The practices that prevent bad software aren't exotic — they're well-understood and widely documented. The challenge is that they cost more time upfront, which creates pressure to skip them.

• Comprehensive test coverage — automated tests catch regressions before they reach production
• Code review — at least two developers must review every change before it merges
• Documentation — architecture decisions documented, APIs documented, deployment processes documented
• Dependency management — regular updates to libraries and frameworks to avoid security vulnerabilities
• Regular refactoring — investing time to clean up code as understanding improves
• Technical roadmap — planned investment in system health, not just feature development

Ask any agency you're evaluating: what percentage of your sprint capacity is allocated to non-feature work? Healthy software teams allocate 15–20% to technical debt management. Teams that allocate 0% are accumulating debt on your behalf.