How to Reduce Software Development Project Cost

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The increase in software development cost has been a consistent global trend for many years now and will continue to remain the status quo. The continually increasing cost of off-the-shelf as well as custom software development has posed serious challenges for enterprises in general and for the software development industry in particular.

Both entrepreneurs and CTOs are highly concerned about how to manage a software development project with 100% cost efficiency. Reducing software development cost is a complex procedure, which consists of many factors that are diverse in different development environments.

In this article, we are going to talk about software development, which specialists are required for a successful software development project, the average salaries of development specialists, how to hire a developer at a competitive price, and the pitfalls to avoid in order to make the software development project a success.   

What Does It Take to Build Software?

Software development, be it is mass-market or custom software, requires plenty of physical, digital, technical and managerial resources, not to mention the expertise, experience, and right skill set to make it a success.

A professional software development company powered by a dedicated team of software developers, designers and consultants, and the latest physical and digital resources required for effective software design and development can manage software development projects more efficiently.  

In general, it takes the following skills, expertise and tools for building a software application in today’s high tech environment:

  • A dedicated in-house or offshore team of professionals for the software development project
  • Expertise in modern software development methodologies like Agile, CI/CD, and others
  • Availability of latest software development tools, IDEs, testing automation tools, version control platforms, coordination and collaboration platforms, transparent and effective communication media
  • Experience and expertise in a wide range of commonly used programming languages, libraries, tools, such as Java, C++, Python, C, CSS, HTML, JavaScript, Angular JS, React JS, PHP, Oracle, MySQL, MongoDB, Joomla, WordPress, Magento, among others
  • A professional workspace with a congenial and enthusiastic work environment
  • Supportive technical and management team with sufficient budgets

Each and every tool, expertise, and skill set costs money. Efficient optimization of the use of those resources will help in cutting the software development cost in the marketplace.

Required Specialists

The specialist roles required for any software development project will vary in terms of the type of development, the methodology used, the scale of the project, the goals of the project, timeline and budget. The roles required in traditional development methodology will vary from the Agile development methodologies. Similarly, different approaches adopted in Agile methodology will also vary to a certain extent.

In general, the successful completion of a software development project requires the following IT staffing resources and qualified professionals.

  • Software developers
  • Software Consultants
  • Business / Data Analysts
  • Software Designers
  • QA Engineers or Testers
  • Database developers
  • Project Manager
  • Technical writer
  • And Associate staff

To manage all the requirements for the successful completion of a software development project, there are huge upfront costs. You have to follow the complex procedures for in-house talent hiring and procurement of required physical and logistical resources.

The best alternative for the software development management is to hire dedicated developers and software development specialists from the service provider companies that are not only cost-efficient but also very reliable.

What is Management of Software Development Project?

The planning, implementation, monitoring, and controlling of the software development project in a professional way is known as software development project management. How to create software efficiently and smoothly is the fundamental question that broadly covers almost all aspects of efficient management of a software development project.

The major processes and phases of the software development project include the following:

  • Project planning
  • Project implementation
  • Project Monitoring
  • Project Controlling
  • Time management
  • Resource management
  • Quality management
  • Stress management
  • Budget management
  • Conflict management
  • Communication management
  • Performance management

Numerous SaaS platforms, software tools, repository storage, and collaboration systems are commonly used for the smooth and effective management of software development projects in different software development methodologies. Among such main tools, a few important ones are mentioned below.

  • GitHub
  • PMBoK
  • JIRA
  • ProofHub
  • Trello
  • Agilean

The management of a software development project plays a critical role in the success of any IT project. This is the reason that a skilled and experienced developer is hired for all major projects.

Major Pitfalls to Avoid for Better Software Development Management

According to the International Data Corporation report in 2009, more than 54% of the software development project failure accounts for the project management domain. Moreover, the cost of lacking in the project performance stands at $122 million against every $1 billion invested in the software development projects in 2016.

To make your projects smoother and more successful, you should avoid the following major pitfalls.

  • Unclear Project Goals & Objectives  

This is the fundamental component of the project in which part you define project deliverables, budget, responsibilities and other important aspects. If you define unclear goals and objectives of your project, your project will not be able to take right direction and will go astray without producing meaningful results.

  • Poor Project Planning

A badly conceived project planning can lead to disastrous outcomes. Poor planning would counter many alterations and changes, which will create a mess in the project workflow, consequently, the project will overrun the budget, timeline and quality benchmarks.

  • Project Team Communication Gap

Communication is one of the biggest factors in the failure of the project management, which leads to a complete mess. The communication within the team should be clear, concise, transparent, and focused on the achievement of the main objectives of the project.

  • Poor Change Management Process 

The only constant in the world is the change, which occurs at every point and corner of the project workflow. A badly defined process of handling the changes in requirements, corrections, right tracking, budget, timeline or any other project processes will increase the rework and incur heavy costs for the project. The quality of the project and its management will go so bad.

  • Poor Conflict Management

A project team is necessarily a group of human beings influenced by the emotions and feelings, which create open or hidden conflicts among the team members. Thus, the de-motivation will develop, which may lead to project slowdown and bad quality of work. So, it is highly required to manage the conflict smoothly in the early stages.

Other than the above-mentioned pitfalls, the projects may fail due to the following drawbacks too.

  • Non-participation of the client
  • Bad prioritization of tasks and activities
  • Not breaking larger tasks into smaller pieces
  • Bad follow up and motivational interactions

The chances of project success improve tremendously by strictly avoiding these pitfalls of the project management of a software development project.

Average Salaries of Specialist Required for Software Development

The average software development engineer salary varies from country to country, and from region to region, and even from city to city in certain cases. So, it is not easy to figure out the average salary of software development specialists globally.

For example, in 2016 the median annual pay for software developers in the US was $102,280. Now, Let’s have a look at the average salaries of the specialists required for software development projects in the USA.

Name of Role

Average Salary in the USA

Software developer

$69,483

Software consultant

$73,059

Business analyst

$59,376

Software designer

$78,306

QA Engineer

$78,336

Database developer

$73,148

Project Manager

$84,742

Technical writer

$58,040

The other resources required for the support of the project management team include an office administrator, network administrator, and other similar types of supporting roles. The salaries of those roles also fall in the same bracket as that of a developer, with a little difference.

Ways of Hiring Software Development Specialists

Hiring technical talent for a software development project is a lengthy and complex process that involves advertising for the job, assessing the job applications, screening the applicants, shortlisting the candidates, interviewing, conducting a written test, providing an offer, issuing hiring letter, developing contracts, and on-boarding the resource. This entire process requires hiring process expertise, coordination, and communication.

This entire process can be accomplished in multiple ways of hiring, like traditional hiring, outsourcing, freelancing, and outstaffing. Let’s have a look at all these ways of hiring the specialists for the software development project.

  • Traditional local hiring  

This form of hiring is the first model adopted in the industries. In this form of hiring the specialists from the local market are hunted through job advertisement in the local media. This form of hiring is also known as in-house hiring. Sometimes, the specialist is hired from the remote market and relocated to the workplace.

However, it is the most costly form of hiring software development specialists and requires many governmental and legal issues to be considered in the hiring process.
It is not suitable for small and startup businesses that have strict budget constraints.

  • Outsourcing

The outsourcing model hiring is a fully managed type of hiring in which the entire hiring process, payment of salaries, quality and project management are fully handled by the software outsourcing company. This is a costly form of hiring as compared to other remote hiring methods. The entire project or a business process is handed over to the service provider party to handle completely. The service provider charges a fixed price for the entire project or process to complete as per agreed SLAs.

This form of hiring is suitable for larger organizations that don’t have the constraints of a small budget to pay the higher rates to the service provider party. There is less control over the development teams in this form of hiring. The development cost of the software application is lesser than in-house development of the same software.

  • Freelancing

Freelancing, also known as control-less hiring is the most unreliable way of specialist hiring. However, the cost of hiring a freelancer is much lower than other forms of hiring.  In this model of hiring, a freelancer (specialist) is hired for a particular job at a very low price. The dedication and reliability of the freelancer completely depend upon the will of the freelancer. So, the recruiting party is at the mercy of the freelancer to complete the task on time.

This is very suitable for projects that have very limited budgets and require low-cost development. It is most suitable for small and startup businesses.

  • Outstaffing

Outstaffing is getting more and more popular in the remote hiring process of software specialists all around the world. It is a great tradeoff between reliability, control, quality, and cost. In this form of hiring, the third party takes the responsibility of hiring, salary payments, local administration, provisioning of required development resources, and managerial activities to complete the project on time and within the specified budget.

This form of hiring is 50% cheaper than the outsourcing model of hiring; so it is highly suitable for all sizes of organizations and all types of software development projects. The custom outstaffing is available at fixed as well as hourly prices.  

Critical Moments That Decide the Success/Failure of Software Development Project

A well-known management consultant, Peter F Drucker said, and said it very well, “Management is doing things right, leadership is doing the right things”. So, both the project management and project manager play a pivotal role in making the software development project a success.

Every moment of the entire process of software development should be scrutinized minutely with the help of the best available resources and planning. A few very important moments that make or break the project include the following:

1. Collecting Project Requirements

The most important point in project management is the collection of a correct and comprehensive set of requirements. If some wrong requirements are picked up at this point, the entire project will take the wrong direction, huge changes, rework, management chaos, and conflicts will arise to grind the project to a halt or a complete failure.

2. Defining the right goals and objectives

After gathering the product requirements, defining the right objectives and goals to achieve is the next big moment, which should be carefully done with the proper involvement of end-users, product owners, technical people and business analysts. A better definition of the goals of the solution will lead to better project results.

3. Resource Planning

Once the right requirements have been molded into solution-oriented right goals, the planning of the resources is a very critical point. A thoughtless resource plan will result in a serious impact on the project outcome. For instance, the planning of insufficient resources will lead to delays, quality and other management issues, and excessive resource planning would overrun the budgets. So, a well studied and minutely refined resource planning should be done.

4. Hiring the Right Resources

After planning, the hiring of technical specialists and choosing the right tools, infrastructure, and coordination and communication platforms are the next big moments that impact the outcome of the project extensively. Always, take the help of experienced HR and technical managers to make a smooth and profitable event of arranging the right project resources.

5. Testing of the Product

The extensive test coverage through automated testing tools is the fundamental point to maintain the quality of the code and achieving the right/desired response from the development. In the present marketplace, the testing is done continuously throughout the development lifecycle. So, the testing moments should never be skipped.

6. Product Feature Reviews

The review of the product quality and the required features, functions and capabilities should always be tested, verified, and vetted from the end-user as well as product owner perspectives. If the product quality, functions and features are not matching, make the changes right away without even waiting for a single moment.

7. Assigning Tasks

Assigning the right task to the right person with adequate targets will lead to a successful project; otherwise, you will mess up the project tasks, timeline, quality, and budget. So, assign tasks carefully to the right person to complete within a reasonable time while maintaining high quality.

Final Takeaways

The reduction in cost can be done by following many tips, tools, strategies, and resource management techniques. A few critical points are summarized:

  • Continuously increasing development cost is a major industry challenge
  • A huge ratio of software development project failure has always been a major concerned  
  • Top 5 pitfalls should always be avoided while managing the project efficiently
  • Top 7 moments in project management should be handled carefully to avoid failure risk
  • Software development project requires a wide range of specialists, infrastructure, and tools
  • The cost can be saved by proper management of specialists, tools, and infrastructure
  • Hiring right development specialists can be done through multiple ways like outstaffing, freelancing, outsourcing, and local hiring

Originally published July 5, 2018 , Updated : August 6, 2020

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