How to Reduce Software Development Сosts


The issue of reducing the cost of developing a software product is of interest to everyone who has a software project. We all see that the modern digital world makes the rules and if a company wants to be successful it cannot refuse software solutions. Hence, businesses have to spend huge amounts of money to maintain an innovative environment. In this article, we have collected the most effective ways to cut the cost of software development, which will let you save money while maintaining the quality of your product.

Table of contents:

  1. Outsource your software product development
  2. Choose Agile software development approaches
  3. Develop only essential features
  4. Hire a complete development team
  5. Involve QA specialist in the development process
  6. Work with expert developers
  7. Additional ways to reduce the cost of software development
  8. Don’t prefer price over quality

Outsource your software product development

We should start with this advice, even if it seems obvious. According to Statista, the worldwide outsourcing market reached $92.5 billion in 2019. Outsourcing has long been considered a proven way to lower costs for a company, especially when it comes to software product development. If you are not going to deploy a large long-term project, then there is no point in building a development team within the company. The difficulty lies in the selection of developers, as well as in ensuring workspaces and constant workload. By outsourcing your project, you pay for the work done and focus on business tasks, leaving technical issues to an outside team. 

Another bonus of outsourcing is the possibility to choose a software development partner from companies around the world and win a good price. It’s no secret that developer rates vary widely. This is a feature of the global IT market. So why not take advantage of this? According to Clutch’s research, among the main reasons why small companies outsource their projects, increasing business efficiency is in the first place. It is well known that the services of engineers in the US and Western Europe are more expensive than those of developers in Eastern Europe. By reducing the cost of developing your software product, you can invest this money in business development and get more. According to the SkillValue study which determined the best developers in terms of price and quality, it is most profitable to outsource projects to Slovakia, Poland, Hungary, and Ukraine. Now you know where to search for an outsourcing software development company. 

Choose Agile software development approaches

Agile combines flexible approaches to software development. This means that changes to a project can be made directly during the development process. Communication between a development team and a customer is ongoing, so the client can see at what stage of the development cycle his product is and whether it meets his expectations. According to the Harvard Business Review, 60% of companies experience profit growth after adopting Agile.

Getting back to cost savings, why is flexibility important? If you are developing a product from scratch, it is almost impossible to plan everything in advance. You may miss some features or suddenly realize that you want to change the structure of your app. Waterfall approaches won’t give you this opportunity. Using the fixed price services, which assumes a fixed scope of work, you will see the result at the end of development and who knows if it will be exactly what you wanted. Of course, a development team can refine your product afterward, but you will have to pay extra for this. By using agile development models, you can adjust the work of engineers without accumulating issues.

Develop only essential features

Project requirements often become a stumbling block in software product development. The fact is that the result directly depends on how clear your requirements are. In order to compile a list of necessary product features, you need to carry out a lot of analytical work, including determining business goals, studying the market, identifying and analyzing your target audience, and studying competitors. Next, you need to prioritize features and separate essential features from the so-called “nice-to-have” ones. Always start development with core product features, it is much cheaper and more efficient. According to statistics, usually, users don’t use even half of an application’s functions. If you don’t want to throw money away, don’t try to develop everything at once.

How to prioritize features and find the essential ones:

  1. Create user flow, the path users take when interacting with your product.
  2. Make a list of features that your product should have at each stage of interaction.
  3. Give priority to each feature, where High priority is fundamental functions without which your app or platform can’t work; the medium priority is the functions that you’d like to have, and that make your product special; low priority is features that require additional elaboration or complex implementation.
  4. Visualize functions using a user flow matrix, where you have a horizontal line showing the main stages of your user flow, and below each stage are functions dedicated to that stage. Then, draw a vertical arrow pointing down from high priority to low priority at the bottom.
User flow example

Now you can see which features need to be developed first. The rest of the attributes should be considered and can be added later if you deem necessary. Don’t forget about some viable features that are specific to your market. For example, if you are developing a financial platform, there may be additional legal requirements for the product. Or if you are developing a mobile application that you are going to promote using app stores, remember that it must meet the requirements of a particular store.

Hire a complete development team

Many people believe that in order to reduce the cost of software development, it is enough to reduce the number of participants in the process. Why doesn’t it work? First, the development process involves different specialists who work in different subject areas. Of course, you can hire a couple of developers and shift all the tasks of writing requirements, coding, and testing to them, but let’s be honest, what result can you expect in such a situation? 

Second, things can get even worse if your project is big enough and you are trying to implement it with not enough people. Before abandoning an extra specialist, weigh all the risks, evaluate the scope of work. Having saved on hiring an extra specialist, you can lose the quality of the product and, as a result, you will have to redo everything. It doesn’t seem like savings. Extra specialists should not be underestimated, especially when it comes to QA engineers and testers.

Involve QA specialist in the development process

Another important point is that testing is crucial at all stages of product development. By postponing tests until the very last stage, you can accumulate a large number of bugs, which will be much more laborious to fix. Even if you work with some of the most talented developers in the world, you still need testers to make sure that your product is functioning correctly, not only from the code side but also from the user side. Here is a brief description of what a tester does at each stage of software product development:

  • The stage of collecting requirements – studying a product, identifying poorly defined elements, helping to compose user stories.
  • Design stage – identifying any logical conflicts in design.
  • Development phase – identifying any deviations from the user’s path, instant testing of new features.
  • Testing stage – testing a product as a single system, cross-browser/cross-operating system testing.
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It is well known that it is impossible to create software without bugs, the key is to fix them as quickly as possible. So, if you really want to reduce development costs take the role of testing seriously. And here’s an extra tip. If you need to hire a tester, you can still reduce the number of hours spent testing with automated tools. Ask your development team to use automated testing where it is possible to minimize the chance of human error and speed up the entire process.

Work with expert developers

Once again, one of the most effective ways to reduce software development costs is to make the fewest mistakes and create the highest quality product the first time around. If you get a poor implementation of your idea, then you will spend more money and a lot of time on revision. An even worse scenario is if you release a product that doesn’t meet users’ expectations and they reject it. This makes it very difficult for you to re-earn the trust of your target audience. Hence it is very important to work with an expert development team that has a proven experience and a portfolio of successful projects.

If you want to get an excellent result, the main factors in choosing a software development partner for you should be the ratio of the company’s expertise and developer rates. By focusing only on price, you can lose the quality of your software product. So, having chosen a region that suits you in terms of the price range (find average hourly rates of developers by region in the table below), start evaluating companies’ expertise. Look for companies with projects similar to yours, study customer reviews, technologies that companies work with, and make sure that a company has in-house developers, the experience of which the provider can guarantee. 

Developer rates by region
Average developer rates by region Source: SharpMinds

Additional ways to reduce the cost of software development

In addition to the above methods, you can find other ways to reduce development costs, based on the characteristics of your project. An experienced technical specialist can help you with this. Here are some other ways that can suit your project. 

  • Use open-source software.  This option is not suitable for everyone, some projects require technologies with paid tools or certificates. But if the issue of price is dramatically important to you, you can opt for open source solutions, which are often free and effective. 
  • Involve DevOps. If you are going to create a product in one go or have multiple products, it is critical to get it right. I this case you need to implement DevOps methods. The integrated work of specialists from different departments will allow you to build a more efficient and high-quality development process. By automating some operations, you can create a unified development environment, speeding up each step of the process.
  • Develop an MVP. MVP is a product with basic functions, ready to market. Then you win the first users and collect feedback to find out which additional features should be developed and which should not. MVP lets you reduce the time-to-market, cut the cost of development, and choose the further direction of development based on the real needs of your customers. Companies such as Uber, Snapchat, Foursquare, and Spotify have started with MVPs.

Don’t prefer price over quality

As a final point, we can say that there are different ways to reduce software development costs. The key is not to lose quality in the race of a lower price. You should understand that there is always a certain minimum of how much a quality product can cost. If some company offers you a price below this minimum, then you need to be prepared for the fact that the result will be far from ideal. An experienced development team will always find ways to cut costs while maintaining the quality of development, and such a team knows where the limit of these reductions is. Feel free to contact us for a project estimation or technical consultation. IdeaSoft experts are always happy to be a part of new interesting projects.

Alina Telnova
Marketing Manager

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