Whenever you’re developing something, regardless if it’s software or a product in a traditional sense, it’s very easy to lose track of how much the development will cost. As a result, your break-even point will be just ridiculous. Your development may be so costly that many problems and processes disrupt it.
The problem with these development teams is that they mostly consist of technicians and programmers, all of whom are project-oriented and not many of whom are finance-savvy. This makes it even harder to keep track of spending and ensure that everything stays on the budget.
The Top 5 Cost Control Strategies Developers Should Know About
With that in mind and without further ado, here are the top five cost-control strategies developers should know about.
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Set a development budget
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Cost monitoring and reporting
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Choose SaaS platforms
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Consider an open-source software
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Consult the specialists
1. Set a development budget
You need to set a development budget to know how much you can spend. This is not always as simple as it seems. Sure, things are pretty straightforward in traditional “waterfall” development, but what about agile development? Here, the development happens in cycles, and it’s much harder to control.
When it comes to waterfall development, the situation is fairly straightforward.
First, you must define the project scope, including features, functionalities, and deliverables. This way, you’ll sketch out everything that’s to be done. Then, you need to work closely with stakeholders and see their capabilities. Ideally, you would break the process into tasks and try to assign a cost to each task. Then, you identify your team’s resources and figure out how much the utilization of each of them will cost.
With agile development, the situation is a bit more complex. You can start by setting a release plan. You can treat this part like waterfall development and set the budget using the same methods.
Then, you can evaluate the scope of each stage (how long it will take and how big of a change you expect to make). Then, you can make a budget proportionally to what you’ve already used.
You can also consider time-boxed iterations.
Just remember that after a release, the project will already generate some revenue, and you can funnel some of this revenue back into the project.
2. Cost monitoring and reporting
Next, you need to understand that a development process isn’t as straightforward as, let’s say, a construction project. It’s not a scenario where you just buy materials and wait to see how many work days you’ll have to cover the wages and equipment rentals. Instead, it’s a scenario where the costs come from all sides and accumulate more quickly than expected.
It’s also easy to lose track of your spending and fail to notice when you overstep your budget. One of the simplest ways to do this would be to get yourself an accounting software. With the help of accounting software solutions, you’ll have an easier time tracking these costs in real-time. This means you won’t have to conduct audits; just make regular checkups.
You should take a few more steps to simplify this process. First, you need to categorize expenses into separate categories. This will help you with monitoring, reporting, and subsequent analysis. It will also revolutionize the way you budget for future projects that you face.
Then, forecasting is important. As we’ve mentioned, the costs of these projects can, sometimes, be quite chaotic. Still, with the right data and some advanced financial apps, you can get insights capable of delivering amazing results.
3. Choose SaaS platforms
You must pick an inherently better cost-control SaaS to manage your costs better. With SaaS, everything is transparent. You pay X amount to use Y services on Z number of devices. This way, you know exactly how much money you will spend on these services this month.
First of all, SaaS is something that your accountant is going to love and be incredibly thankful for. After all, it’s a model with a very predictable subscription model. At the start of every month, you know how much your next bill will be. This is a privilege you don’t encounter often in business.
Next, it’s a very scalable model. At any given point, you are certain that if you need more, you’ll know exactly how to get it. Not only that, but you don’t have to make a costly switch to a different platform. All you’ll have to do is switch to a more expensive plan or get a few extensions. Either way, it’s a well-trodden path, and you won’t have to make too big of a shift with your business over it.
One more important thing to consider is that SaaS has no upfront infrastructure costs. You don’t have to buy anything; you just subscribe. You also get to save a lot of money on staffing. The thing is that SaaS platforms have their IT team in charge of maintenance, which means that this won’t be your concern. It will reduce maintenance-associated costs by quite a margin.
4. Consider an open-source software
There was a stigma about open-source software being inferior to their paid counterparts in the past, which is as far from the truth as it gets. The thing is that open-source software has its problems, but, for the most part, its performance can be comparable to paid software, and it comes with many cost-related benefits.
The first example of this is that, with open-source software, you get a lower total cost of ownership to start with. Licensing, support, and maintenance are all less expensive (well, the license is free), meaning you just end up paying less for using this software.
Another great advantage of an open source is the fact that you get to enjoy wider community support. Open-source platforms have a problem-resolution mechanic that is more community-oriented. In other words, you will likely be able to resolve the problem independently rather than hire outside help or outsource it to them.
The level of customization and flexibility on these platforms are at the next level. This means that you can alter them to a degree where it will feel as if you have a unique (and your own) platform without actually having to build or buy it.
5. Consult the specialists
Software developers often take a route of self-sufficiency, which is logical but may often cause problems. After all, developers often don’t make platforms that they themselves are a target audience for.
For instance, if you’re developing dental software, chances are that dentists, dental assistants, dental administrators, and even receptionists at the dental practice will use it far more often than you. So, why not ask them for insight on the topic?
In other words, you can’t afford to be disconnected from your target audience, not just because you’re developing a platform that might miss its mark. It’s also because you don’t understand all the intricacies of the features you must develop. You don’t understand where it’s OK to cut costs and where you should spend the majority of your development process.
It’s also important to mention that bringing in specialists can drastically cut your time-to-product. Instead of working with abstract data and drawing insights, you can just ask a person who is going to use your platform to clarify how they plan to use it. It really is as simple as it sounds, but it’s also incredibly effective.
Completing a project on a budget is what determines its success
With unlimited resources, no project would be difficult to complete. However, when it comes to building something on a budget, managing resources, and controlling costs, things get really complex. A development team that learns how to do this right is on the fast track to immense success.