Software development is all about minimizing risk and maximizing return. The costs of software development are always related to risk, and that risk is usually high — the average large software failure rate is over 70%.
But the hidden costs of software development go beyond dollars; software is an investment that represents your brand and your team. And at the end of the day, you need to deliver a good return, regardless of whether that is a return for your shareholders or your ROI. Software development is a risky proposition — to minimize that risk you need to be aware of ALL the costs.
Cost of Software Development on Your Brand
Your software products are a direct reflection of your brand to your target audience, and you can’t afford to let them down — your reputation is the only thing that you have.
The risk that comes with software development is failure, and when you fail, you are also risking your brand. You are risking spending money on something that, if it fails and doesn’t bring the intended returns, could result in the overall value of your brand being diminished. Your brand will go down in lock-step with your revenues.
You want to attract, retain, and continue to show value to investors. To do this, you must maintain market perception, market relevance, and your market position; all of which you can do with careful planning.
Do you have a solid roadmap that spells out your technology goals and aligns your business objectives with technology milestones? Or if you have successful processes in place and products already on the market, have you done a 360 tech assessment to determine how you can improve?
Your software development efforts should improve your brand, not take away from it!
Cost of Software Development on Your Team
Build a strong core team who will be with you for many years — it’s fine to augment this team with additional help, particularly in areas of specialization, but avoid being transactional and short-sighted. Remember, you are looking for good returns in the long haul which means you need to invest in your people.
Software engineers are not a commodity.
Your intellectual property is in their heads, which means if they go, your IP goes with them. When you take the time to build relationships with your teams, they take ownership and are more committed to your company and your projects.
Think about it — consistent teams will generate more consistent ROI for the long haul. This means retention is key to hitting your ROI goals.
Your company culture is the key to successful retention. Retention is vital for collaborative project success AND talent retainment so your IP stays in-house.
It is simply a better investment to have your teams learn the necessary skills rather than outsourcing them. Investing in your team helps their career development, improves retainment, and helps protect your intellectual property.
When you DO have to call in the “hired guns,” treat your contractors with the same respect you show to your team. Even your outside partners should feel like they are part of your team — avoid the “us vs. them” culture.
The Bottom Line: Take good care of your team for them to take good care of you. Your long-term investments in people and culture will pay off in the long run.
Cost of Software Development on Your ROI
Software needs to be built right, built fast, and built to last. These are the three elements that matter the most when it comes to securing your ROI.
I think we’ve all heard a software development manager talking about getting their resources so cheap because they chose to outsource work to a junior development team. They explain away their throw-away code by saying that their costs are so low that they can afford to fail, but this is the wrong mindset.
Failing fast should not be your business plan.
Choosing to use cheap resources and throw-away code means that you just blew an entire quarter of opportunity that your competitors likely used to get ahead of you. That’s a quarter where you’re not generating revenue on the products that you built, a quarter where you’re not building the value of your brand and your company.
You have to look at software development through the eyes of an investor. Are the risks you’re taking necessary, and what are the returns? A risk is a balancing act – every decision a software development team makes impacts the success and viability of the software products. It’s not just about containing costs, but also about maximizing the ROI.
Getting a quality MVP to market doesn’t mean you have to lag behind the competition- speed is a huge factor in getting your products to market. Speed doesn’t mean you need to rush and cut corners.
When you rush to get your MVP to market, you might get demand buzzing, but soon enough that throw-away code needs to be tossed and you’ll be scrambling for the NEXT GEN – which you know is the kiss of death for your product.
Rushing stresses your teams as they try to rewrite code the way it should have been written, or automated, from the jump; and it doesn’t do your ROI any favors. Costs balloon quickly when you’re up against time and demand constraints. Your internal teams run out of horsepower, forcing you into outsourcing which can be costly and puts your IP at risk.
Getting to market quickly means leveraging automation and low code – and PlatformPlus® is your solution to doing this successfully without harming your ROI. Instead of waiting another quarter to generate net new revenue, do it right the first time so your ROI doesn’t have to suffer. Your software should always deliver value so you can maximize your ROI.
Software That’s Built Right, Built Fast, and Built to Last
Your costs are never going to be so low that you can afford to fail. Sure, failing fast is optimal, if you’re going to fail, but remember our mantra – build it right, fast, and build to last – and you’ll never be haunted by the costs of NEXT GEN-itus.
Built Right. You need to be quick and clean, which requires intent. The pressure to get your MVP out as quickly as possible – from the market, your board, and your investors – PLUS the pressure on your development team, is going to result in quick and dirty if you aren’t careful. It’s the dirty part that kills your ROI.
When you’re building your software products, you don’t just want a v1, you want a SOLID v1. if you’re successful, the market will demand more; if your v1 was built on dirty, compromised code, you aren’t working with a solid product. Don’t just be quick – be quick and clean so your software products are built right the first time.
Built Fast. The market is demanding and you must deliver value to your customers quickly. The need for speed in software development is no joke.
Built to Last. Even if you build it right, that doesn’t necessarily mean it’s built to last. We don’t believe in throw-away code; that’s something you’ll get from the big tech consulting firms, and it’s not what you want or need to be successful.
You want modern, current, and profitable software that will stay relevant for a decade or more. This impacts your returns and leverages your investment, both of which improve your bottom line.
Imagine investing, and then having to repeat making that investment every three years. This is massively different from making an investment in your software development and not having to re-invest in that for another 15–20 years. Incremental improvements over time are a better investment than continued massive cash outlays again and again.
If you’re thinking this isn’t a real thing — how many NEXT GEN products have you seen? NEXT-GEN means it’s being done again because it wasn’t right the first time it was released.
If you truly want to minimize risk and maximize returns, there’s no choice but to build right, fast, and build to last – and there’s no way to achieve all three without a heavy dose of automation.
Building your software products to last requires less capital to maintain your investment, which means you are generating revenue for many years with much higher profitability.
Minimizing Software Development Costs
When you look at minimizing software development costs, you should view these costs through the lens of multiple stakeholders, including your:
- Investors
- End-Users
- Development Teams
- Leadership
- The Market
When you build software right and build it to last, you’re playing the game wisely. There are many masters to serve in software development, but this mantra serves them all.
Now that you see the more hidden costs of software development, it’s time to consider them in action. You can build better software without sacrificing your brand, your teams, ROI, or speed. Let’s talk.