Founder’s guide: How to Reduce Software Development Cost

Founder’s guide: How to Reduce Software Development Cost

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Software development cost is always a big concern for founder of a digital company. Product development takes away the big part of the initial investment whether it is a minimum viable product (MVP) or a full-blown platform. The founder is always looking to reduce the cost of software development. Here are some tips form Simpalm, a custom software development company in Chicago to reduce the cost;

1. Define your requirements clearly

This is the very first step for product development where many founders flounder. Founders tend to create high-level requirements but don’t go deeper into the requirements. Not having clearly defined requirements create issues and cost escalation in the entire software development process. The best way to define your requirements is by creating a product requirement document (PRD).

  • A clear predetermined objective saves time and money to be spent on unnecessary development processes.
  • PRD clearly defines the value and purpose of your software to the software development team.
  • A development team uses PRD to communicate what to build, who the product is for and what purpose is it going to serve. It gives a common understanding of the intent behind a product.
  • Requirements are the basis of a successful product, as it helps your development team to transform your early concept into a fully functioning software.

An impressive PRD must include some key points such as business requirement, product objectives and vision statement, list of features, product and technical specification, maintenance/upgrade requirements and choosing a platform.


2. Prioritize your features, follow the lean development strategy

Trying to have all the features in your software is not the right view to develop your product. Prioritizing features using a lean development strategy is the best way to reduce development costs and putting more focus on important features. Lean development strategy is also often referred to as a minimum viable product (MVP). It is all about creating and deploying an app with just enough features that serve the purpose of the software and getting it used by some of the potential users.

  • Having a laundry list of features does not increase the appeal of your product, aligning the features with the objective of the software makes it more attractive and cost-efficient.
  • Having lots of features increases your cost and time to design, develop and test the product.
  • More features also increases the cost to market the product and also increases time for users to adopt the product.
  • Money saved in avoiding unnecessary features can be used in the marketing and the next iteration of the product development.
  • The lean or MVP approach can eliminate unnecessary activities and as a result, it can reduce cost.


3. Do your design right

If your blueprint of the house is not right, it will come out to be of your liking and you will end up spending more time later to alter it. According to Robert Pressmen’s book “Software Engineering: A Practitioner’s Approach For every dollar spent to resolve a problem during product design. 10 dollars will be spent on the same problem during development. and multiply it to 100 dollars or more if the problem had to be solved after the product’s release” Thus it is important to correctly design the app before getting started with its development.

  • Have the proper wireframes done for your software, defining every screen, flow and data points. This helps you to recognize and define the right features for your product.
  • Use wireframing tools like Figma, Balsamiq, Sketch to convert your requirements into visuals.
  • Have a very good visual designer to create a UI design representing the entire UI/UX design.
  • Use tools like invision, Figma, sketch to test the entire UIUX. Create a design test group to find out any glitch in the software.
  • Any post-development change in the design can cost you ten times more than the cost during the development.


4. Use the Global Shoring Model

Gone are the days when going full offshore was considered the model to reduce the software development cost. Founders and product managers have realized that the numbers initially look low when starting to work with an offshore development company since their labor rates are low. Based on research and experiences, offshore development takes longer, design experiences are not done right which increases the cost by spending more money on enhancement. There is always a communication gap, time zone gap, and cultural gap, which makes clients spend more time explaining the vision and still not get it right. Founders have learned the lesson that going offshore fully doesn’t work.

Does going full onshore work? Not if you don’t have deep pockets. It cost a lot working onshore and many times you may not find the right resources. So what is the solution? A model that has evolved for founders is using a global shoring model. In this engagement model, the senior team is onshore and the rest is offshore. The senior team includes Project Manager, Tech Lead and UX designers and developers and testers are offshore.

  • This model brings the best of both the places, the client always communicates with the onshore team, which is always easy due to the same timezone and culture.
  • The onshore team will do the strategy, design and planning to make sure the right product is being built and everything is communicated.
  • The onshore team works with the offshore team to explain the project. Coder and testers offshore will develop the software and communicate it back to the onshore team.
  • This also makes it easier for the offshore team since all requirements, specifications are set properly.
  • The model brings substantial cost savings for the founders, it costs around 20% to 30% of the onshore model and still bring the same value.


5. Decide between fixed cost vs hourly billing

This is always a struggle for founders while building a software product. Should they go for a fixed cost or hourly cost? Every founder would like to go for a fixed cost since they will have better control over the budget and engagement, but many times it can backfire if attention is not paid in the design process. Going for hourly engagement will give more control to the team developing the product, they can just continue to bill you without having much accountability. Here are my few tips on what to do for the pricing model:

  • It is recommended to do the design process on hourly cost and the development at the fixed cost as this will give you the best output for your money.
  • Having design on an hourly basis will give freedom to you and your designer to think creatively and come up with best features.
  • You can have an initial estimate from the designer on how many hours they expect, this will give you a ballpark number in your budgeting.
  • Once you have the designs and specifications done, you can show it to any development shop to get the fixed cost estimates. It becomes easier for developers to estimate the cost.
  • If you try to go for fixed cost without having proper design it will be unfair to you and the developer, especially when there is scope creep and everyone will start fighting on the specifications and the cost.
  • Once you have fixed cost for development, you can link it to milestones and then pay the money as milestones are done.
  • The hourly cost is recommended for the software product where initial specifications can not be defined much and require substantial amounts of research and development.
  • No one can really estimate the efforts for R&D types of projects, so it is better to be hourly based on those projects with some estimates in place.


6. Do the testing yourself

As a founder, you might be thinking why should I do the testing myself, that should be the role of the development team. Well, the development team only does the smoke testing and sanity testing most of the time. Unless you have mutually agreed, they generally don’t do user acceptance testing and test cases. It is done by the founder or founder should hire their own tester to do the detailed testing. It is not a tough task for founders to learn, can be done by watching some tutorials.

  • Learn to do detailed testing yourself to save the cost on testing and encourage the development team to be more quality-centric.
  • If you don’t have time or skills to do your own testing, then hire a manual tester, you can find a good tester on Upwork for $10/hour.
  • Do the testing for every release build.


Final Thoughts

Software products have become the need for every business to achieve their business vision and survive in the competitive business world.  You might need a custom website or mobile app or enterprise software to manage your business, so reducing software development costs is definitely a priority for every business. Following the above cost reduction guide and hiring a reliable outsourced team will help you reduce your software development cost and get the best out of your resources.

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