How to Cut the Cost of Your Software Development Project

One of the most important questions for IT companies’ clients is how to cut down expenses on development. The desire is quite normal, especially given the coronavirus economic recession. At Fively we are convinced that it’s dangerous to save on quality though each software project can be successfully managed, which often results in cost reduction. In this blog post, we’ll share the cost-cutting hacks for those who are planning to get a solution developed.

The weighted average of IT spending across the industries is 8.2 % of revenue. According to the same source, the top 3 priorities for IT spending are digital transformation, enhanced cybersecurity, and cloud migration — ambitious objectives that obviously demand substantial financial flows. It leads us to the thought that a project’s scale and complexity level define the spending. Therefore, you should clearly understand your project’s size and specifications to avoid being misled when negotiating software development costs.

When you achieve a clear understanding of your needs, think about the following measures to optimize your expenses.

Choose the Right Pricing Model

How many pricing models can you name? In our article “Software Pricing Models: What’s the Difference?”, we described the most popular ones with their derivatives and explained the favorable conditions for all of them in detail. There are three basic software payment models:

• Fixed price — a predefined sum of money for a predefined amount of work with no adjustments on the spot, good for small-scale projects with a clear roadmap;
• Time and materials — you pay after a predefined period and the sum of money depends on the performance within that period; good for long-term projects but you can’t know the final costs in advance;
• Dedicated team — you want to control the whole process and assemble a development team that gets paid for the hours spent working on your project

When you correspond your needs with the right pricing model and find professionals who agree to work under these conditions, you will save a lot of resources.

Select the Right Contractor Type

When you’re planning to hire a developer, you have several types of contracts that affect the custom software development cost. Regarding the current state of your national economy, you may get high-class services at a lower price.

First of all, you may hire a freelancer, which is the cheapest option. You can use the marketplaces for freelancers and find a specialist from the other side of the world if you wish. In the article “How to Find the Right Freelancer on UpWork” we explained how to work with one of the largest talent platforms to minimize the risks. However, freelance specialists usually can’t cover all project needs and rarely demonstrate a high level of management and quality assurance.

The second option is to build an in-house team. You can relocate the members and organize offline working space or, which is more pertinent today, create an international online team. It’s a good way to hire the best brains, but also a very expensive one as you’ll pay salaries and bear the costs for taxes, software used, and so on. Moreover, creating an in-house dream team will take a lot of time.

Last but not least, you may find an outsourcing partner. This is one of the most popular contract types. If you aren’t experienced yet, check our blog post “How to Decide Which Outsourcing Provider to Work With”. Here we want to point out that making a deal with an outsourcing company is a good way to entrust a dedicated professional team with your project. They will cover all the aspects — from idea validation to deployment — and won’t demand much of your personal time and involvement compared to in-house though you’ll save similar quality guarantees.

Understand the Needed Seniority Level

Software development prices vary depending on the expertise of the developers to be involved. Sometimes you don’t need a guru to get the work done and the lack of knowledge can be offset by the desire to work and explore project matters in-depth.

Seniority levels fall into three main categories:

• Junior developers — fulfill simple tasks, need support and control but can learn quickly and cost least expensive;
• Mid-level developers — already have some background and experience with complicated tasks, can work independently with the varied rates;
• Senior developers — the best brains and skills, can explain the nuances of certain technologies and advise the most suitable ones for a project that can’t but affect high costs

Once again we want to draw your attention to the importance of understanding your business needs and project requirements here. Neither hire overqualified specialists nor underestimate them.

Encourage the DevOps Culture

When a code is written, it will take time to deliver the results to the ultimate user. During this time, several specialists should add value to the product, for example, performing code reviews and analyzing the completed tasks. This period can either become very productive if you make improvements and quickly solve the issues or you can be stuck waiting for feedback and approval from all the parties involved. To avoid waste of time and depreciation, introduce agile methodologies and automate everything that can be automated.

To organize continuous performance from iteration to iteration, introduce the DevOps principles to your company. Their idea is to unify software development and software operations so that you get improved communication and collaboration between specialists, higher speed, and better quality. It implies investments at first but you’ll see the remuneration in the longer term.

Go on

We selected and described the core aspects of project management to save on software development. If you begin with them, you’ll get certain financial breathing space.

However, the list of tools for cost-effectiveness can be longer. If you have more ideas and successful case studies, we’ll be glad to read about them in the comments.