Optimization of Software Development Costs Using Outsourcing

The cost of software development varies greatly. It depends on many factors, including the type of software. In general, however, developing custom software for a business can be quite expensive. The developers should implement novel ideas to give the business some advantages over its competitors. But then again, getting this type of software can cost your business or company a lot of money.

Different Strategies to Reduce Software Development Costs

Thus, a question is, especially among small businesses and startups, how to reduce software development costs? Rescinding the use of custom software is not an option in the modern world. Using low-quality software is not an option either. Hence, reducing costs seems to be the only possible way to get functional software that your company can afford. Luckily, there are several ways to do it. Let’s review them briefly.

Outsource Software Development

This allows your business to save money since in-house costs are inexistent. You won’t have to pay salaries, compensations, and other benefits. The software outsourcing company BoostyLabs, for example, can contribute expertise (blockchain, fintech, cloud) to your software development project. They put the experts that can start working on your project straight away. You don’t need to invest in personnel training.

Create a Detailed Specification of Your Business Requirements

This can be done by a software development company, of course. But, why pay for something you can do on your own? Moreover, you know your business better. Through this strategy, you’ll have a very precise plan to start working on the development of your custom software.

Establish Proper Communication with the Development Team

To avoid extra costs, draft a project plan with very clear milestones. Make sure that the development team understands well what you want in your custom software. Assess the feasibility and define the steps to take the project to successful completion. Deviations from the original plan will always cost extra money.

Apply QA from the Very Beginning

Make sure that your QA team is involved in the early stages of the project. They will be able to detect bugs and errors at an early stage. This will prevent the rework of the software at a later stage, which will have an extra cost.

Focus on Necessary Features Only

At least for the initial version of your custom software, don’t include more functionality than strictly needed. There may be many nice features that you would like to have in your custom software. But remember, everything has a cost.

These strategies can help reduce the cost of software development without compromising quality. To get the best result, you should apply them all. In the following section, we’ll discuss in more detail the first one: outsourcing.

Outsourcing Software Development: A More Detailed View

In case it is not completely clear, outsourcing is a business strategy.  It consists of hiring a third-party company to do some of your business tasks. This strategy is more commonly used by small companies. Bigger companies resort to outsourcing, too, especially during times of economic uncertainty.

Theoretically, you can outsource any task in your company. Most commonly, companies choose to outsource nonessential tasks such as digital marketing, human resources, accounting, legal services, and others. But, what type of task can you outsource in software development? Some of these tasks are:

  • App development;
  • Web development;
  • IT product development;
  • Data management.

The benefits of outsourcing these services are manifold. First and foremost, you reduce in-house costs. You also save money and time since you don’t have to train your personnel. When you hire experts from a third-party company, the personnel they provide are ready to start working on your project. Moreover, you won’t have issues with hiring the wrong people. When you outsource a service, if the employees that you get are not suitable, you can simply ask for different ones.

On the contrary, if your company hires people directly, there are many costs involved. Your human resources department has to interview a large number of candidates. This is a time-consuming process that can delay the beginning of your project. And, as mentioned, if you hire the wrong people, you’ll have to pay compensation and start the recruiting process all over again.

Despite its many benefits, outsourcing has some drawbacks. Let’s take a look at some of them:

  • The third-party company can have access to sensitive information. This can be somehow minimized by signing nondisclosure agreements. However, the threat of being a victim of industrial espionage is always present in outsourcing;
  • The workflow is not completely transparent in some cases, which can be used by the third-party company to charge hidden fees;
  • It’s difficult to apply your quality control standards to the work done by a third-party company.

For these reasons, selecting a reliable outsourcing company is vital.

You May Also Like