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8 Ways To Reduce Software Development Costs Without Cutting Headcount


8 min read

The question of how to reduce software development costs has always been critical for new enterprises. One of the most effective methods to save expenses is to give a “minimum viable product” (MVP) rather than a “full” one. By making a minimally viable product (MVP), you can test your business idea quickly and spend as little as possible on software development.

In this article, we’ll go through a few easy tactics that may significantly reduce the cost of producing an MVP without losing quality. Let’s look at software cost factors and how we can change their influence on your budgets.

What are the factors that drive the costs of software engineering?

Before moving on to ideas for minimizing software development costs, let’s determine what factors influence software engineering costs.

Feature Set

The core of a software product is its feature set, which also has a significant impact on its overall cost. Try to launch an MVP first—a product with as few features as possible—to get the first user feedback. Adding more features to the product at the start will increase the development time and cost. The less features you are leaving for your product, the more you are cutting labor costs.

Remember that the Minimum Viable Product is neither a prototype nor a mockup. An MVP is a product that meets the requirements of its intended consumers and covers their needs.


When we list out the software cost factors, it is necessary to admit that design isn’t the most expensive part of a product. It can always be done much cheaper. The idea here is not to exaggerate.

The user experience (UX) of a product affects its effectiveness in terms of customer adoption, retention, and repeat use. On the other hand, the user interface (UI) helps to show who you are as a brand and what makes you different from your competitors.

Software complexity

Determine which platforms will be used to engage your target audience before you start production. You can, for example, create two separate web applications for mobile devices or create a responsive web application that consumers can access from any browser. If you want to reach your target audience via mobile devices, you should develop an app for Android or iOS (or both). The answer to the question “What are the costs of software engineering?” increases in direct proportion to the number of target platforms.

How much software engineering costs also depends on how many internal and external integrations your software product needs, such as with customer relationship management (CRM) and human resources (HR) systems.


A capable team will help to avoid constantly growing software development costs. At first glance, it seems that more specialists will lead to faster development. However, this is not always the case. The more part time employees you involve, the more difficult it is to keep everyone on the same page and lead the project to success.

Due to poor communication and management, development slows down, delays happen, and the total cost of the project goes up.

Why Software Costs Overrun?

The first indicator that cost overruns are likely to occur is when a project is started without a detailed financial plan in place. Without such a framework, it is impossible to estimate or budget costs, let alone track progress.

We all know that in the real world, projects rarely go as planned, but that is the nature of application development. Cost overruns occur due to delays, scope changes, and inaccurate estimates by custom software companies.

A detailed financial plan will make it easy to recognize if costs are out of control when the project is underway. Spending $45k in the first month of a 6-month project when you planned to spend $35k is a warning signal of likely cost overruns in the future.

The reasons for exceeding the budget can be different. Now we will look at some of the most common factors why custom software development overruns budget.

  • Poor project estimates. Proper planning is the first step to delivering a flawless project. For this, it is necessary to develop appropriate budget and time forecasts. You will save money if your budget is based on verifiable facts and the actual costs of completed projects with similar scopes of work. Budgets based on assumptions are doomed to fail and increase the likelihood of future cost overruns, whether due to the omission of a significant cost item or the failure to account for the full cost of a critical component.
  • Scope creep. Real-world projects must be adaptive to attract quality and meet changing stakeholder requirements.
  • No risk management. It is impossible to plan for every possible situation, but ignoring risks when planning can lead to delays and cost overruns that were not planned for.
  • Ineffective collaboration. Most of the time, delays in a project’s implementation are caused by bad communication. These delays can cost a lot of money.

How to reduce software development costs

Now that you, as a business owner understand what factors most affect the cost of software development, we can look at proven approaches to reduce these costs in product development.

Prioritized Features

When developing a minimum viable product, mandatory features should take priority over nice-to-have features. Your product will not be able to provide real value to the target audience if they are missing. On the other hand, nice features make the user experience better, but they aren’t required and can be added later in the process.

Some important features that should be in the first version of the bank app are the ability to transfer money and check the balance of an account. The ability to split bills is a useful feature that a custom software development company can add later.

When features that aren’t necessary are added and MVP features aren’t put in the right order of importance, software development costs tend to go up.

Design Systems

Don’t skimp on UI and UX design, as it has a direct impact on the number of people who use your custom software and how well it works. However, this does not mean that you have to start from scratch when creating an MVP. Instead, you can use a design framework that has already been built. This is a set of HTML and CSS UI components, design templates, and style standards that can help you build your product’s user experience and interface.

First Testing Approach

Involving full time quality assurance (QA) specialists at an early stage of MVP production is a great approach that can reduce the cost of building software. By finding bugs early in the release process, QA specialists can help you avoid a flood of problems caused by wrong or conflicting criteria.

If your team builds and designs your solution without first thoroughly testing it, it may contain bug-prone features that will require additional time and money to fix. For a project to be successful, test engineers should be involved at every stage, including gathering business requirements, designing the user experience and user interface, building the backend, building the frontend, and putting out the release.

Cross-platform development

If your target audience uses different operating systems, cross-platform app development can be a cost-effective alternative. Instead of creating two custom software solutions, one for iOS and one for Android, use cross-platform development technologies such as React Native, Xamarin, and Flutter.

Having your app function on multiple platforms is one of the best ways to save money. If your software needs an update, you can limit yourself to updating one codebase.

Open-source solutions

You can reduce your labor costs by using free and open-source software development tools. Many programming language communities have emerged to speed up software development by producing and sharing reusable building blocks. This is how more than 1,500 developers together created one of the most popular JavaScript frameworks, React.

Open-source frameworks and libraries can save a lot of time on a project’s schedule because developers don’t have to start from scratch to add functionality.

Backend As a Service

Using a BaaS solution helps in the development of the server architecture of your application. BaaS frees up resources to hire software developers who work on the client side, which is what real users see and interact with.

You don’t have to reinvent the wheel every time you want to include a component that is common to most applications if you use a BaaS solution. User authentication, file storage, databases, infrastructure, email, and push notifications are just some of the application components that BaaS providers often handle. BaaS solutions like Firebase, Parse, and Kinvey are viable options for the backend of your project.

Suitable Project Management Approach

If you want a smooth development cycle and lower software development costs while adopting humane employee schedules, selecting the right project management method is critical. Agile, Lean, and Waterfall are the three most well-known and widely used approaches. Despite the fact that the initial costs of implementing Agile and Lean procedures are higher than those of Waterfall, these methodologies emphasize faster profit generation.

Before making a final choice, identify the principles and vital aspects of each project management method.

Outsource Development

You will save money on recruiting, training, and cutting staff by outsourcing development. When delegating software development to external contractors, you can choose between outstaffing and outsourcing.

Outstaffing is a type of delegation in which an intermediary company searches for and hires developers on your behalf. Many companies resort to the services of outstaffing organizations to save money on recruiting new staff and the administrative costs associated with employee turnover. With this plan, it’s up to you to make sure that your project goes well and that the software is delivered on time.

One of the main advantages of outsourcing is the ability to delegate product development and risk management to a third party. Despite the higher cost compared to outstaffing, it is an ideal option for businesses that do not have much experience in development. The time it takes to bring a product to market is shorter, mistakes can be avoided, and obstacles can be overcome more efficiently by outsourcing.

Software Development Provider Without Overpayments

Why outsource to save software development costs? When you outsource development, you interact with teams that are used to collaborating and have established protocols, so they will not waste time getting up to speed on your project. In addition, when you outsource, you have full control over how many people are working on your project and how they are distributed, allowing you to respond easily to changing priorities and workloads.

Companies should use advanced technologies and smart project management approaches to increase productivity and gain additional savings. However, sacrificing quality for cost savings can be a concern throughout the life of a project.

It doesn’t have to be this way. Dashdev’s software development expertise ensures that your project is completed on time without compromising quality, optimizing your return on investment. We ensure that saving your budget will maintain the integrity of the project by using an innovative and flexible approach. Collaborate with the best to create the best!

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Table of contents
Why is software development so expensive?
Design, quality assurance, data analytics, and other areas contribute to the software cost. Creating software is more than just typing code. Everyone benefits when a firm works with a developer to create new software. If your firm needs a cost effective one-of-a-kind solution, contact our development team.
What are the factors that drive the costs of software development the most?
The cost of custom soft development is determined by the complexity and number of users. It also depends on the level of complexity of the program and the peculiarities of the project, such as whether there are experimental functions, what UX methods are used, how long and deep the maintenance is, the volume and complexity of testing, working hours of the outsourcing company, etc.