How to Cut Costs at Every Stage of Software Development

Many software development projects fail because they run out of budget. There can be hundreds of reasons why, such as poor research and planning that lead to unclear business requirements, or the lack of proper communication. It is very common that companies cannot adequately evaluate the risks their project could face at each stage of software development, and calculate their budget expenses accordingly.

Let’s talk about what you can do to reduce software development cost while keeping the desired quality intact.

Lay out the relevant business requirements

“Data indicate that 60–80% of the cost of software development is in rework,” according to the Carnegie Mellon Software Engineering Institute. Therefore, the best place to start, when you want to keep your budget in check, is having clearly defined requirements that will help you save time and resources regardless of the stage of development you’re currently at.

The more time the development takes, the costlier it becomes. Especially when we’re talking in-house, where your dev team still gets their paychecks no matter the stops, delays and throwaway code caused by floating business requirements, uncertainty or sudden change of course.

Thorough requirement analysis and a deliberate approach will streamline your development process and make sure that your software development team knows exactly what to do. By spending less time fighting defects and going over the same thing again and again, your dev team can focus on bringing the product to the market faster. This will help you avoid extra costs, provide you some budget space for deployment, training, infrastructure, and free up some time for other business-related tasks.

Communicate your goals clearly

Providing your software development company with proper documentation from start to finish is one of the key points towards reaching the desired results faster and significantly cheaper. Having a solid BRD (Business Requirements Document) and proper communication in place means better collaboration and consensus among different departments (management, development, marketing, etc.). Staying on the same page with the team can save you tons of money in the long-run, as well as save you the trouble of spending much time on meetings, conference calls and onsite visits.

Always try to avoid ambiguity in your communication, as misinterpretation can result in unsuitable functionality, faulty design and, in the end, a lot of your precious time wasted on guesswork, costly iterations and revisions.

In-house or remote, insist that your development team creates and maintains detailed documentation at every stage, encourage them to give expression to any unclear areas in the scope of the project. First-hand insight can be quite helpful when it comes to avoiding or eliminating costly mistakes.

Simplify where you can

Think like a customer when it comes to design and prototyping. Understand what key functionality your target audience needs and prioritize the absolutely necessary features in your MVP, eliminating the ones that feel raw, or simply “nice to have”. Make sure your future product is easy to navigate and intuitive to use.

The key to successful release is making your product something that your customers would want and be able to use, since those extra features on top may not be what your customers are looking for. Remember that more features can always be added through subsequent extensions in the future versions of the product. After all, the longer your project spends in development, the more opportunity it misses on the market, leading to potential revenue loss.

While considerably reducing the development costs, starting small and simple will also aid your market research, showing how welcoming your target audience is towards your freshly released product and making it easier for you to plan your next move.

Invest in testing and QA

Start testing early in your software development lifecycle. Make certain that your quality assurance and testing teams are involved at the very beginning as they can help you identify many existing and potential issues, like inconsistencies and design flaws, in the initial stage of development. This will minimize potential risks, give you more control over your project scope, and, as a result, keep your budget safe from unexpected and unnecessary expenses.

Testing and automation will also keep your project from accumulating bugs and errors at the design and prototyping stages while QA works on catching every defect in time to save you from mid-project redesigns, throwaway prototypes, or any other red flags that could hurt your budget and time to market.

Investing in QA and testing will guarantee the final product meets the specified requirements in full and is delivered to the market at the highest quality.

Contemplate your deployment strategy

Getting your deployment done right is a major advantage a company can get over competitors. That is why so many companies today have adopted agile methods and DevOps in particular. It is not only faster in general, but also leads to fewer failures and quicker recovery time by means of the latest developments in cloud computing technology.

Automate as much as possible! In addition to saving time, automating your distribution, update and monitoring processes will eliminate the possibility of human error or system replication, as well as require significantly less employees to maintain the processes.

It is also crucial to determine the locations of your target audience so that you deploy your services exactly where your customers need them, providing the most comfortable experience and quality connection performance.


Outsourcing is probably the simplest way to cut costs in software development, unlike hiring a full-time in-house dev team, which can be truly expensive. The initial cost reduction comes in the form of absence of in-house expenditures like salaries, benefits, insurance, etc. Why hire in-house specialists for a short-term project or a full-time Python developer for a specific one-time task? It is much more cost-effective to hire a vendor and get a dedicated team or augment yours with team extension services.

Even so, choosing the right outsourcing vendor requires a thorough cost-benefit analysis. Depending on your goals, you could always save short-term by going with the cheapest outsourcing company, but keep in mind that lower rates do not always translate into a better quality-price ratio. Going to qualified vendors, on the other hand, professionals who care about the quality they deliver and avoid any technical debt, can save you significant amounts of money in the long-run.

There are many popular outsourcing destinations today, from India and China in Asia to Argentina and Brazil in Latin America, where hourly rates for the quality you get vary to a great extent. However, if you’re looking for a perfect balance between costs and quality, consider Ukraine as your outsourcing destination. Ukraine is one of the software development outsourcing leaders in Eastern Europe, and has proven to have the best-equipped, skilled, talented developers with years of experience delivering quality products to the markets globally. You may not find bottom dollar rates in Ukraine, but you’re guaranteed to get top dollar results.

Summing up

Software development can be more affordable than you thought it was. With the right approach, communication, strategy, and a reliable development team, you will not only effectively save money, but end up creating a product of the quality you never imagined you could attain.

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Head Of Business Development at QArea. I’m passionate about new technologies and how digital changes the way we do business.