13 Key Variables Impacting Software Development Expenses and Strategies for Cost Control

Rajat Chauhan
4 min readOct 27, 2023

Businesses are increasingly using software solutions to optimize their operations and ensure business continuity in today’s digital landscape, with cost-effective software development topping the priority list in the wake of the post-pandemic. Yet, software development is riddled with complexities and potential pitfalls.

In this feature, 13 industry experts, including founders and CTOs, reveal the common challenges in software development and offer actionable strategies to mitigate costs. From emphasizing quality assurance and testing to adopting iterative development approaches, these insights provide a roadmap to success in software development cost management.

  1. Invest in Quality Assurance and Testing
  2. Take a Blended Approach to Outsourcing
  3. Revisions Ripple: The Cost of Iterative Changes
  4. Hire Qualified Specialists for MVP Projects
  5. Prevent Scope Creep with Thorough Planning
  6. Start with a Clear Project Plan
  7. Save Costs with Pre-Designed Templates
  8. Broaden Recruiting and Locational Strategy
  9. Conduct Upfront Technology Assessment
  10. Upskill Team for Chosen Tech Stack
  11. Consider Maintenance as a Continuous Cost
  12. Manage Costs According to Software Size
  13. Adopt an Iterative-Development Approach

Invest in Quality Assurance and Testing

Many software development projects fail because they didn’t do enough testing. This kind of oversight often leads to problems that cost a lot to fix after the project has been launched and can even threaten its success. A proactive approach to testing is the best way to reduce this risk. At our company, we invest in strong, automatic testing tools and methods from the very beginning of a project.

We strongly believe in testing things all the way through the development process, and we stick to this practice religiously. We’ve been able to create a culture of quality awareness on our team by using best practices for quality assurance in the industry, like test-driven development and regular code reviews. Including both coders and quality assurance experts in the testing process has also always helped us find a wider range of possible problems.

Leonidas Sfyris, CTO, Need A Fixer

Take a Blended Approach to Outsourcing

In the intricate world of software development, especially when working across diverse geographies, one predominant factor affecting costs is the variance in hourly rates and skill sets across these regions. Imagine you’re buying coffee beans. If one region offers premium beans at a higher price, while another offers decent quality at a lesser rate, which do you choose? Do you compromise quality for cost, or vice versa?

To mitigate this, a blended approach is recommended. By leveraging the strengths of each region — say, design expertise from Ukraine, back-end development from India, and quality assurance from Vietnam — both cost and quality can be optimized.

Isn’t it fascinating how diversification, a principle often lauded in investment portfolios, can be so aptly applied here? This method not only hedges against the risk of relying on one region but also ensures that we get the best talent from each, leading to a win-win situation.

Ankit Prakash, Founder, Sprout24

Revisions Ripple: The Cost of Iterative Changes

The software development process often involves a series of iterations, where specific features or components undergo modifications or refinements. It’s not uncommon for projects to see multiple revisions, especially when developers aim for perfection or when the scope changes. Each iteration or revision demands additional hours of work, which naturally inflates the project’s overall costs. From reworking code to reassessing functionalities, and even potential debugging, every tweak can lead to a domino effect of tasks that can stretch the budget.

To manage costs effectively, it’s crucial to have a clear project scope from the outset. Regular communication between stakeholders and developers can help align expectations and reduce the need for extensive revisions. Using iterative development models like Agile can also help by setting clear goals for each phase and obtaining feedback early, thus reducing the chances of major overhauls later on. Setting a predefined limit on revisions, unless absolutely necessary, can also ensure that costs remain in check.

Nirav Oza, CSO & CCO, Ace Infoway

Hire Qualified Specialists for MVP Projects

For a small MVP project, it’s crucial to hire highly qualified specialists who can work quickly without getting overly idealistic. Run-of-the-mill developers might get bogged down by minor details or get stuck on some problems for a long time.

To assess developers’ abilities, it’s better to use test tasks during the recruitment process. As the project grows, you add junior and middle developers to your team. This allows for efficient task distribution based on implementation costs. Senior developers tend to solve very simple tasks not much faster than junior ones, which means that they get more expensive.

At the same time, juniors might take a long time to solve complex tasks, making their overall cost higher than that of senior developers. To manage development effectively, establish a culture of coordination, task distribution, control, and monitoring. This helps in assigning tasks correctly and supporting weaker colleagues, preventing them from getting stuck.

Daria Erina, Managing Director, Linked Helper

Prevent Scope Creep with Thorough Planning

One pivotal factor influencing the cost of software development is “scope creep.” To mitigate this, a well-defined project scope is essential.

Scope creep occurs when additional features or requirements are introduced during the development process, often without proper evaluation. This can lead to increased development time, resource allocation, and ultimately, higher costs.

To address scope creep, we emphasize thorough project planning and requirement analysis before development begins. Establishing a clear and detailed project scope document, with all stakeholders aligned, is crucial.

Additionally, implementing robust change management procedures ensures that any proposed changes are evaluated for their impact on cost and timeline, preventing uncontrolled expansion of the project scope.

Fahd Khan, Director of Marketing and Technology, JetLevel Aviation

Read the full insights here: https://www.aceinfoway.com/blog/factors-that-affect-software-development-cost

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Rajat Chauhan

Rajat Chauhan is a Manager of Digital Marketing at Ace Infoway Pvt.Ltd — a leading web and mobile development company with offices in LA and India.