7 Methods to Reduce Software Development Costs

How to cut down individual software costs

A unique business needs special software. Individual software creates a brand image, solves user problems more efficiently, and optimizes a company’s work. But developing such a program from scratch is not easy, moreover, it is expensive. Is it possible to reduce software development costs without compromising its quality? Here are seven ways to do it.

Method 1: Plan a software development project

Many software development projects fall into a common trap. First, the management allocates a budget, and then a project is planned. If you follow this logic, then your business will not take into account hidden costs and will exceed the estimate. Developers will create a program that does not suit the company.

Therefore, you should plan everything related to the project at the very beginning, and then invest in it. At least, it is clear where your money goes in this case. The Discovery Phase will help you to cope with this task. It allows you to:

Define the business goals of the product

To plan a project, you need to understand what business problem the future product will solve. You should research the target audience and its needs in advance. You can conduct business analysis on your own or contact IT outsourcing companies. Their experts will find out what functionality an application should include in order to benefit customers and businesses.

Break down your goals into tasks

Then you need to break down the goals into minor tasks and schedule the execution time and budget for each of them. Usually a Business Analyst and a Project Manager help to deal with this issue.

The BA knows what the software development company can offer the client: a list of the functions of the future application, the number of IT specialists, and other important issues. The BA clarifies the vision of the product by the customer to create requirements and determine the functionality that the developers will evaluate. This IT specialist clarifies plans for future scaling and possible integrations so that an architect takes this into account when designing the application architecture.

Method 2. Prepare the requirements for the software product

One of the easiest and most powerful ways to reduce software development costs is to eliminate any ambiguity about how the software should work and look. This means describing functional and non-functional requirements for the program in a special document — SRS (Software Requirements Specification).

If you can make it yourself, great. If not, specialists of the partner company will do it for you. In an IT outsourcing company, a Business Analyst deals with these issues. They communicate with representatives of the organization, find out the requirements, and fix them in special documents: SRS, Vision & Scope, Backlog, and User Story Mapping. Without them, the project is bound to fail.

Here are a few problems that can spoil your project if there is no clear documentation:

  • developers will create the wrong functions or forget about important ones;
  • UX design will not appeal to the target audience;
  • the product will not solve business problems;
  • you will have to spend money on fixing errors;
  • the program will be released later;
  • ROI will be lower than planned, and so on.

You should consider a small margin of budget and time in case you want to change the requirements so that they do not slow down the project and do not cost a pretty penny. For 53.80% of software development companies, changing requirements is the biggest challenge. Some changes require new development or code adjustments. Hence the budget grows, and the deadlines are shifted.

Special software — a change control system — helps in this matter. Any adjustments are made to the program and their impact on the project schedule is monitored. Usually, the Project Manager is responsible for this issue. They coordinate the work so that the product goes into production on time.

Method 3. Test the idea in the market

If you want your product to go to market in October 2022, and not just in 2022, plan your Project Road Map in detail.

Organizations that want to test their idea in the market start development with an MVP (Minimum Viable Product). It does not take much time to create it, the development takes from 1 to 3 months. IT professionals include the minimum number of critical functions needed for the application to be fully used.

The MVP enters the market and attracts the first users. When the idea works and customers are willing to use it, the development continues. If the idea doesn’t work, the project is ended. The business loses its initial investment. But it would lose much more in case it developed the product, invested in it, and didn’t receive ROI. It is better to lose $3,000 than $30,000, isn’t it?

When an MVP is successful, the team continues to develop it according to the plan set by the Business Analyst and the Project Manager. So, MVP acquires new functionality, and an improved version of the system is regularly released.

Method 4. Choose the optimal tech stack for your project

Did you know that the cost of a product depends on what technologies it is created with? Therefore, if you choose the right technology stack, you can reduce project costs.

What is the right stack? For example, you can use open-source tools for the project, they are mostly free. You can also opt for technologies from trusted vendors (like Angular or React).

You should also understand that the more popular the technology is, the easier it is to find developers. There will be no problem with Javascript. But if you need experts in the Rust language, then finding such a specialist will be more difficult, more expensive, and will take more time.

Again, an experienced team of an IT outsourcing company will respond to your request and select a profitable and cost-effective technical base for the software. These points are discussed in the Discovery Phase.

Method 5: Prioritize features properly

You must not rely on intuition in software development. You always need to adhere to practical methods, in every aspect. Especially when it comes to prioritizing features for individual software.

You can sort tasks by importance and complexity in a simple way. All functions are divided into three groups according to feasibility, desirability, and visibility.

The first category includes functions that can be created because you have the necessary resources for this. The “desirable” group includes features that the target audience needs. “Visibility” means features that are in line with the company’s business goals and market trends. Then you should place them on the gridline as shown in the figure below.

So, you will clearly see what needs to be implemented first and what functions can wait. Especially if time and resources are limited. This way you won’t waste 9.9% of each dollar due to poor project prioritization.

An experienced project manager can easily carry out this task. All you have to do is include such a specialist in your custom software development project. Time, resources, and budget will be under full control.

Method 6. Hire specialists from a good IT outsourcing company

Software development outsourcing is the right solution for a business that wants to save money. And here is why:

  • It’s cheaper than hiring full-time IT specialists.

For a one-time project, hiring your own employees (BAs, designers, developers, QAs, PMs, and others) will be unreasonably expensive. Moreover, they will need workplaces, and you must buy equipment, software, and development tools for them.

Outsourced IT teams already have their infrastructure, so you only pay for custom software development services. Moreover, in the global IT market, you can find a specialist whose hourly rate is lower than the average in your region. In some cases, savings reach 40% -60%.

  • Outsourcing specialists have more experience than full-time employees.

Specialists of large IT companies create software for a wide clientele. To stand out in the market, they are regularly trained and certified. Therefore, the tech stack and experience of outsourcing teams are richer.

The customer does not need to spend time and money to train a full-time engineer. They can quickly find a suitable specialist in an IT outsourcing company and include them in a distributed team.

  • Software development companies have a well-established project management model.

When a customer approaches an IT company with a request to “create a quality program while keeping costs as low as possible,” the custom software provider knows what needs to be done. It organizes work on the project in such a way as to relieve the burden on the customer. Specialists conduct market research, create requirements, plan tasks, etc.

Hence, outsourcing software development is a win-win solution. It is only important to find a reliable software development company with the right tech stack, experts, and experience. Thematic platforms such as Clutch or Goodfirms can help you with this. By rating, reviews, and other characteristics, you can evaluate if a custom software development company is suitable for your project.

Method 7: Include quality assurance at the early stages of the SDLC

Every bug found during development costs money. And it will cost the company much more if a bug is found when customers are already using the application. Therefore, if you secure the product against errors, you will significantly reduce software development costs. According to IBM estimates, you can cut them down 4–5 times.

In the future, unnoticed security bugs can lead to serious hacks, data leaks, fines, and, in the worst case, bankruptcy.

Therefore, to prevent future spending, it is worth including testing early in the development cycle. Companies that use continuous testing, integration, and delivery pipeline:

  • are 208 times more likely to deploy code;
  • fix bugs almost 3 times faster;
  • make 7 times fewer errors in the release.

It is important to make sure that the testers of the IT outsourcing company regularly check the code in manual and automatic ways. Code reviews and different types of testing are extremely important to the project. A comprehensive quality control system will prevent software from entering the market with errors. Thus, the customer won’t lose money and reputation.

Conclusion

The PMI study found that one in three projects (31%) falls short of its goals, 43% go over budget, and nearly half (48%) end late. To prevent this, plan software development activities, budget, functionality, and other issues that we have mentioned above in advance. But the most important thing is to choose a reliable IT partner that will consider all the needs of your business. The team will create requirements and a product roadmap and will follow them.

The right technology partner will not only create quality software. Such a company will try to reduce software development costs and take care of the app after its market launch. So, the customer won’t have to worry about maintenance and updates.

Andersen, an IT outsourcing company, can become such a partner. We know the best practices and methods of development, task planning, and budgeting. Before each sprint, we present reports on the work done. We also support products after their release.

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Yuri Filatov

Yuri Filatov

IT Expert and IT Delivery Manager at Andersen