Cutting Costs on App Development
Updated: Feb 20, 2019
WITHOUT BREAKING THE BANK
At times estimating costs and budgeting for a software technology product, which has no physical output, feels like getting into the world of the unknown. After all, you want to build the most amazing app but you don’t want to sell the farm to get there.
At those crossroads, you should be asking some of the following questions:
How do we scientifically derive a realistic budget and what should we expect for that budget?
How can we ensure we don’t overrun the budget?
How do we mitigate the risk of under budgeting, which might lead to poor results, loss of time and loss of money?
avoid loss of opportunity?
These apt questions must be raised and addressed before you spend the first minute on the app. With answers in hand, the next steps can be taken to review and cut costs/excesses from the budget. The business will not be able to save costs unless you know the cost (or consequence) of NOT spending that money.
Cutting costs has to be a very well informed and thought-through decision, as there could be severe repercussions putting the entire project at stake, including:
Poor quality or incomplete solutio
Cutting corners on some key feature sets and scope items
Unable to onboard necessary talent
Unnecessary strain on the team to deliver results in a short-period of time
Dropping out and shutting down the project in its entirety
These potential pitfalls must be kept in sight while drafting the plan to cut the costs. Just like any other part of a business, the actual act of cutting expenses should not be considered as a need-based or a “situational” action triggered due to some unforeseen events or findings. Cutting costs should also not be viewed with a negative connotation or as an action taken by a company or a project which is in distress. In fact, cutting expenses is all about driving efficiency and focus to improve the final deliverable.
So what are some of the other myths about cutting costs in app development?
When in dire straits - start cost cutting
Cost cutting could help improve the business bottom line
Look at the biggest expenses and start trimming them down
Cost cutting is a need-based evil
Cost cutting slows down business growth
Cost cutting is not required for well funded and large companies
Cost cutting should be approached without any reservations. It could be a product, project, or even an organization wide review of all the associated cost centers. The process must have the support from all stakeholders across all departments and functions. This core group must agree on a long-term vision followed by the short-term needs of the business.
Now, let's look at how you should approach cost cutting when dealing with any software projects, including mobile apps:
There must be well defined long- and short-term goals
Costs which help in building intellectual property/core business products must be prioritized
Identify and agree on must-have needs vs good to have frills
Perform a holistic review of costs across ALL cost centers
Prioritize the execution, as to what can be delayed until a later time, thus staggering the expenses.
Review the projected revenue stream and how it can feed into the life-cycle
Expenses must be reviewed with tangible outcomes and scrutinized with forecasts before spending any further.
Continue the review cycles, detect issues and nip them in the bud.
To put the above steps into perspective, let’s take an example of a startup team trying to build a technology product/app. Being an early stage startup with a shoestring budget, while not affecting the value of the deliveries from the software, the team could take the following practical measures to ensure optimal utilization of their funds:
Put together a clear minimum viable product (MVP) road map with incremental deliveries
Identify and engage with a mature technology partner or robust technical team
Review the progress early in the cycle from week-to-week to course correct the spending
Avoid reinventing the wheel on fundamental technology building blocks
Piggyback on what already exists and focus on core value offerings
Avoid “technical debts” due to short sighted or rushed decisions.
Cost cutting is not a negative activity, but rather a necessary step in the process of planning and execution of any project. It should be considered as a “Cost Control” mechanism to ensure the money is spent wisely towards achieving the short- and long-term business objectives. Reviewing costs and focusing expenditures must be an implicit part of the business review process followed by suggestions/advice to loop back into the planning process.