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Ways to Reduce Software Development Costs: Practical Tips for Your Business
10 min.

Whether you are a startup or an enterprise, you might end up spending a huge chunk of your budget on software development. Minimizing the costs for development while not lowering the level of quality is one of the biggest challenges out there. That is why we are going to look into ways to reduce software development costs.

What Cost of Software Development Depends on?

First and foremost, it depends on the length of the project, the complexity, and the number of people required in order to carry out the tasks, but if we go further in, it will also depend on the tech stack because if the project uses an uncommon language or a legacy framework, it will be harder to find competent professionals and they may end up charging a higher amount comparatively.

It is also important to keep in mind that software development may cost you more depending on the seniority of the personnel working on it; for example, if there are 3 senior developers working on your project, they may tend to charge more compared to 1 senior and 2 mid developers. 

reduce development cost is hard with high senior developers salary

Another factor that will help you reduce your development costs is the location of your outsourced vendor, if they are located somewhere in Central Europe, they will tend to charge less compared to an in-house team based in the US.

One more very important thing that can help reduce cost of development is remote work, Imagine if you have a team that works remotely and you don’t have to pay for an office, utilities, and their coffee, wouldn’t that save you a lot of money?! That is why you should check out why do companies choose to outsource work

High-Cost Software Development Factors

To find out how to reduce software development costs, you first have to understand software development cost factors. There are a lot of factors that play a huge role in determining the cost of development for your project, some of them are as follows: 

In-House Team

Onboarding, training, and integration processes for each employee are going to cost you a chunk of your budget before you even start the development process. In addition to having extremely high salaries in nations like the US, the UK, and so forth, finding employees takes a very long period, and during that time, recruiters must still be paid. 

Lack of Planning 

If you think that planning every single detail is a waste of time, you will spend a lot of your time and budget fixing numerous things that will be wrong with whatever you have developed. A lack of planning will lead to the failure of your project instead of its success. 

having a clear development plan reduce software development cost

Bad Communication

If you are not communicating with your employees or your outsourcing partner, how will they be able to understand what is required? In the same way, if the team is not in sync with each other, there will be mistakes made, and eventually, it will be noticeable when the development process enters its later stages, there will be bugs, maybe chunks of code missing, etc.

Inexperienced Team 

Whether you outsource or hire in-house, if your team is inexperienced, they might end up costing you double compared to what you were expecting initially. Inexperienced professionals don’t always know how to deal with problems or how to work together in a team. They are constantly in need of someone with more experience to look after them.

Not Investing in Testing

Testing is a very important aspect of software development. Finding bugs and problems at the testing stage is more cost-efficient than releasing a product and finding out later that it’s full of bugs.

testing is a key point in software development cost reduction

How to Reduce Software Development Costs

So now that we know what factors increase the cost of development, let’s talk about how to reduce software development costs. There are several things to consider: 

Outsource

Outsourcing, especially offshore outsourcing, is a proven cost-effective method. It will not only reduce your expenditure but also have other benefits, like giving you access to an experienced development team and business experts who are willing to help you with all your requirements.

If you have developers who work remotely, it will save you money in terms of setting up a workplace, paying for utilities, and providing lunch for your employees. Also, consider going for the time and material method instead of a fixed-priced model so you can have complete control over the budget and can pay monthly instead of paying huge chunks of the budget at agreed milestones. 

Please note that it is very important that you find the right partner for outsourcing, that is why you will have to research as much as you can before you sign a contract. Ask your potential partner anything you want to. Have them give you the contact information of one of their clients, so you can ask them about their experience. You can also check sites like Clutch, LinkedIn, Upwork, etc for reviews. 

Plan Ahead

Thorough planning will help you tackle a lot of obstacles along the way and reduce development costs. Plan everything first and then set a budget accordingly because if you approach this the other way around, you will end up going over budget because of hidden expenses. The average rate for outsourced software developers can help you get an idea and help you reduce software development cost.

You should write down all your requirements and have clear a set of goals and a process in mind which will help you not only reduce your costs but also save a lot of time. That is why here at ProCoders we have something called the ‘Discovery Phase’. During this stage, we analyze everything and together with our client we come up with a plan.

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Communicate 

It doesn’t matter if you have an in-house team or are outsourcing, clear communication is the key to success. You should ensure that proper communication channels are established and that everything is documented so that you can always go back and look at them if something does not feel right. 

With that being said, it is essential that you have clear goals set up after planning and that your team or partner are aware of the requirements so there are no misunderstandings, along with that it must be stressed that if the team is on the same page, it will be easier for them to collaborate and create a high-quality solution.

To ensure that your vendor does not overstate the number of individuals involved in the project, if you are outsourcing, make sure you can contact each team member and speak to them directly.

Too much communication can also be a problem, make sure to keep your door open for people to approach you but avoid having too many meetings as they can affect productivity. 

Choosing the Right TechStack

Being a tech expert has its advantages when you want to reduce software development costs without compromising quality. Choosing a tech stack with a lot of open-source tools and libraries can help you reduce costs and save time.

If you don’t have the knowledge and are going to outsource development, talk to your vendor about what frameworks they suggest and how they can help reduce major development costs. They will help you decide what stack suits you best. Here at ProCoders, this is also discussed during the discovery phase. 

Staff Augmentation

Imagine you have six developers in-house working on a project, and all of a sudden you feel the need to hire three more for your project. That is where staff augmentation comes in. Your outsourcing partner will provide you with the required amount of experts, but you will have complete control over the project and will not have to spend company resources and time hiring the required personnel; meaning it will reduce the cost!

Find out How the Outstaffing Model Fits You

Using Agile

It serves as a form of market change insurance. By using this process, you ensure that your business is adaptable and prepared for change. The agile methodology allows for adjustments at any point and the quick addition of new features. The flow of the process from ideation through launch is substantially leaner and more concise with Agile. Overall, your software development project will save money if testing, iteration, and quick adjustments are used. 

Utilizing DevOps

DevOps is yet another technique to reduce the cost of developing your application without sacrificing quality. The aim of this methodology is to enhance developer productivity.

Planning, coding, creating, testing, deploying, running, monitoring, and providing feedback are all ongoing processes in the DevOps process. Quick communication and better prioritization enable engineers to complete tasks successfully on the first attempt.

The sensible consolidation of duties is a component of DevOps. Continuous integration and continuous delivery are the essential elements of this technique.

Start with MVP (Minimum Viable Product)

If you want to build a custom solution with millions of features, it will end up costing you a lot. So if you are thinking to reduce the cost of software development, you should aim for a product with all the basic features required instead of creating something extraordinary with a lot of features. 

You can work your way up from there, first having all the critical functions, and then slowly adding features that you would want to see. This way you can keep on testing your product and making sure that it is on the right track and it will be easier to make changes if needed. When you have your MVP ready, it can be then pitched to the investors in order to show them what you are working on and secure additional funds.

Want to Develop your Own MVP? We Can Make It Happen!

Try Offshoring

Outsourcing the services of a development located in another country, usually on another continent, is known as offshore outsourcing. An example of offshore cooperation is a North American company working with a development team from Central Europe where the developers charge less compared to the local market and good developers are easily available. You can choose to work with the least expensive developer who meets your standards for quality without having to spend a lot of time and resources on the hiring process.

Test, Test, and Test once Again

One of the most effective ways for cost reduction in software development is testing. You should make sure that testing and making sure everything is up to the mark quality-wise starts at an early stage. If you have a good testing system implemented because no matter how small an error is, it can lead to you spending a lot of money and time just to correct it if it is found in the later stages.

Low-cost Trap: Why Low Rates Doesn’t Mean Saving Costs?

So you found an outsourcing partner that is charging less than the average market rate. Does that mean that you have hit the jackpot and will have a high-quality product for cheap? Well, if something seems too good to be true, it usually isn’t, and that is the case here too, and if you are interested, you can check out how to do IT cost optimization in order to truly understand cost optimization! 

If the vendor is charging less, it most probably means that the quality of their code is going to be lower than what one would expect. On top of that, you might end up with a bunch of inexperienced developers who would need additional mentoring to create something according to your requirements, and you should keep in mind that all this is happening while they are on your payroll. If there is a problem with coding, then your QA engineers will spend a lot of time finding all the bugs, and you might have to bring in other developers just to fix what the previous team has messed up. 

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Hence, it is better to pay a bit more and have a high-quality product than to have a low-quality solution with numerous bugs that will make you overspend and use a lot of time and resources in the long run.

What is ProCoders’ Expertise in Reducing Software Development Costs? 

Here at ProCoders, to reduce your expenses, we listen to your requirements first and understand what you want. We have a discovery phase during which we do our research, plan, and estimate everything, including the pricing and duration of the partnership. 

We ensure that we understand which model reduces the cost of development of software for you and we never make a sacrifice in terms of quality! We have a pool of experienced developers who are already used to working together, so no mentoring or integrations are required. Since our hiring procedure is well-established and we only ever employ qualified professionals with expertise, we know where to look for high-quality and affordable developers. Once everything is planned, they just have to start working! 

We make sure to implement testing systems and QA engineers to make sure that we are keeping high-quality standards and reducing ongoing software development costs by the technologies up to date and using a tech stack that suits your needs the best.

FAQ
How do project management practices influence the cost of software development?

Project managers are like middlemen between you and the developers, they might not be developers themselves, but they understand the developers and speak their language, which means that they can help translate your needs in a manner that the developers will find easy to understand and save time and money by avoiding any misunderstandings. 

If there is a project manager on a project, they can let the experts focus on the development while they keep you in the loop, thus saving their time and making sure that you are comfortable with the process and happy with the work!

What is the biggest cost of software development?

The most expensive part of software development is typically incurred during the development phase, when the highest number of professionals are working on your product on a daily basis! The main factors are their experience, the more experience the higher the charge!

Which engagement model reduces the cost of software development?

The practice has shown again and again that a dedicated team is a model you wanna go for if you are planning to save and get a product with minimum obstacles along the way, the reason for that is that this model gives you flexibility, total control and complete transparency throughout the project and you only pay for the time your team spent on the project!

Conclusion

If you are an owner of a company, you might often ask yourself how to reduce cost of software development. Well, the answer is simple, understand what you need, plan and make sure that your employees or partners are aware of your requirements! 

At the same time, do not try to save money by not hiring QA engineers or by hiring inexperienced developers, it will end up costing you a lot more. After that, the next most important thing is to focus on the tech stack and creating an MVP product and not overspending on the UI in the early versions. Once you have everything figured out with the core features, then you can focus on making it look pretty!

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