How to Reduce Overhead Costs in Software Development Projects

Software development projects are all about short development cycles, low costs, and efficiency. But sometimes things just don’t go as planned.

Whether you’re an established company or a bootstrapping startup, it’s natural to try and find ways to stretch the dollar as much as possible. But this is not always clear cut or easy as overhead costs will be inevitably relative to the project and the business.

Although there is always a chance for surprises popping up down the road, there are some steps that you can take to keep overhead costs down.

1. Build a Team of Highly Experienced and Skilled Developers

Taking control of your software development costs starts with your development team. If you’re in a hurry and don’t do you homework, you might set yourself up for failure. But if you take the time to build a team with the right skills, experience, and personalities to enable a highly productive culture, you’re on the right track.

Overhead costs usually start accumulating when the project gets delayed. So if you have the right team in place, you can save time as there won’t be a learning curve. Further, having a skilled and experienced team will also help when it’s time to handle the bugs that need to be cleaned up.


Check out our tips to help build a highly productive software development team remotely.


2. Define Both Functional and Non-Functional Requirements

Every development project is different, so it will always help to have someone with a technical background to put the pieces together. Further, mapping out the technologies that you want to use, programming languages, and design principles early on can help make this process a whole lot easier.

Functional and non-functional requirements should also be clearly defined and documented to be accessed by the team at any time. By not doing this from the beginning, you create the risk of building a product that's misaligned with your needs.

Additionally, any faulty requirement can be fixed with good communication and improved documentation. It will also help if you provide easy access to requirements that are directly linked to features of the application within the prototype (as soon as possible).

3. Batch Revisions and Reworks

Software development projects are never going to be straightforward as the requirements and even the idea behind the project can evolve over time. Further, you might also identify new opportunities when you get feedback from beta testers.

But regardless of whether it’s adding a new feature or revising it, make sure that you batch revisions and reworks to save time and money. This is also the best way to focus on the bigger picture during the development cycle.

Although this is a common aspect of software development, it’s extremely difficult to scope ahead of time. As a result, it’s also difficult to budget and set aside time because you really can’t make an accurate prediction (so be aware that your guess might be way off the mark).


Check out our tips to help estimate software projects in man-hours realistically.


4. Start Conducting Quality Assurance (QA) Tests Right from the Beginning

QA can have a huge impact on your overhead, so implementing it early on can help keep both development and maintenance costs down to a reasonable level. Further, if you call the experts in during the systems definition phase to design all the relevant testing procedures early, it can make it a lot easier further along the development phase.

Additionally, they will also be able to identify if the functional and non-functional requirements are actually testable. This will help smooth out the whole QA process and ensure that there aren’t any nasty surprises waiting for you.

5. Consider Outsourcing

You can also significantly lower your project overhead costs by outsourcing all or part of the software development to a contractor overseas. There are plenty of highly qualified and experienced developers available in Eastern Europe and South Asia, so finding a highly cost-effective solution won’t be difficult.

Besides giving you access to highly qualified IT workforce abroad and helping shorten your time to hire and, thus, to market, outsourcing allows you to significantly reduce premises costs. You can let your IT staff work remotely and move your management team to a smaller office to save rent, business rates and utilities.

Let's take a look at Silicon Valley

Office space rent in a co-working or business center (own 600 sq feet office space) will cost you over $61,000 per year in Mid-Market, San Francisco; 4 desks in a co-working place will cost you around $24,000 a year. In order to build a team efficiently, you'll most likely have to hire a professional IT recruitment agency that will charge you up to 25% of developer’s total first year annual earnings as a recruitment fee per employee. Along with inevitable overheads, these expenses will literally blow up your budgets and make it next to impossible for your company to stay ahead of the curve. Unless you're a mega monopoly tech giant, of course!

Anyway, if you choose to go with a team outsourcing option, it’s still better to take your time and follow the preceding four tips as you still need to make sure that you have the right developers on board and you still need to manage the project.

Are you looking to build a highly productive team of seasoned IT specialists onshore, offshore or nearshore fast and with no IT, HR and admin hassle?
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Andrew is our IT storyteller and copywriter. His current undertaking is big data analytics and CSS as well as digital design and branding. He is a contributor to various publications with a focus on new technology and marketing.

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