How to reduce software development costs

Investing in software development is a focus for many businesses nowadays, yet the cost often soars. These companies frequently have a budget while striving to develop cutting-edge software to spur growth. The top priority of all firms is consistently reducing project costs without compromising quality.  

In this writing, we’ll discuss how to reduce software development costs to help you stay within your allotted spending limit.  

9 Tips to reduce software development costs. 

1. Detail the project’s requirements and scope

Make sure you communicate the project’s scope, objectives, and functional requirements, whether you begin working with a software development company or an in-house one. To get accurate quotes, the IT partner needs to get explicit specifications.  

If you develop your application with a dedicated team, having precise project requirements laid out in a detailed Software Requirements Specification (SRS) document can make it easier to communicate with developers because there will be fewer misunderstandings and the introduction of errors. These misunderstandings could result in your needed development budget, which has to be much greater than you had planned. 

2. Consider in-house or outsourcing

You might be wondering whether to hire an in-house team or outsource work. Although each model has its advantages, outsourcing is better if you prioritize cost optimization. 

Hire remote developers. 

Hiring remote software engineers is a wise choice if you want to create a high-quality program while keeping costs to a minimum. Furthermore, you will be able to approach a diverse pool of talent from around the world. 

This model organizes project work in such a way that it reduces the burden on your company. Specialists conduct market research, develop specifications, plan tasks, and so on.  

When you do software development in-house, you will need to hire professionals for various tasks, such as project managers, business analysts, testers, designers, developers, project managers, and more, which may cause cost and time issues. 

Related article: How to Hire Offshore Developers for Your Project


Build your tech team in a low-cost country (ODC)  

As the trend toward offshore software development grows, so does the demand for an offshore development center (ODC). Due to its low cost and simple access to a vast pool of technical expertise, it is steadily growing in popularity as an alternative to software development solutions. 

Outsourcing software development to companies like Vietnam can significantly reduce costs. The average hourly development rates in less expensive regions get you quality work while saving you 30–40% on development costs. 

Related article: Build Your Own software development team in Vietnam

Outsource development team use time and material model. 

This is currently known as one of the most well-known outsourcing models because of its adaptability. The time-and-material model signifies payment for the outcome based on labor costs. The client pays for the man-hours spent by the contractor’s team to provide mobile development services and get them to market. As a result, the time-and-materials model is better suited to longer-term projects where the final requirements are unknown and can be changed on the fly. 


This is the best model for the Agile or Scrum software delivery process, in which short sprints produce tangible results. 


The client has complete budget control and only pays for the results delivered.  


To meet his business objectives, the client can quickly change the project scope, requirements, features, or team size. 

3. Make a thorough plan

Budgeting first and planning later causes a common business problem that costs more money. If you use this flow, your company usually overestimates expenditures and fails to account for hidden expenses. Therefore, carefully prepare every aspect of the project before starting to budget it.  

Defining goals and understanding the future product’s business issues are necessary for project planning. It is better to do a prior market research study on the target audience’s requirements. You can work with an outsourcing software development agency or undertake business analysis independently. The professionals will determine what essential features are helpful to users and businesses.  

After that, you must schedule the execution time and money for each goal’s smaller tasks. Typically, a project manager and a business analyst work together to solve this problem. 

4. Adopt Agile

The Agile software development methodology enhances teamwork and communication between the client and developers throughout the agile development process. By designing your software solutions following this methodology, you ensure that your projects are adaptable and ready for change. 

Agile development allows for adding new features on the fly and changes at any stage. With Agile, the sequence of steps from ideation to launch is much leaner and tighter. Overall, testing, iteration, and rapid changes help to save money in your software development project

5. Implement DevOps

DevOps is yet another way to optimize your application’s development budget. The purpose of this methodology is to improve the way developers work.  

DevOps is a never-ending cycle of planning, coding, building, testing, deploying, operating, monitoring, and feedback. Thanks to quick communication and better prioritization, developers can get it right on the first try.  

DevOps entails the intelligent consolidation of responsibilities. The main components of this strategy are continuous integration and continuous delivery. 

6. Select the appropriate tech stack

Selecting the right technology stack early on can reduce risks and result in significant savings. 

The appropriate tech stack includes a front-end framework, a server-side framework, databases, programming languages, and other components. Choosing the right one could help your business save time and make cost savings while allowing for easier upgrades, stable operations, and a shorter time to market for the software product

7. Prioritize features for MVP

First, launch an MVP, not a prototype or a mock-up, but a working product with the basic features. This is not a full-fledged product but it allows you to interact with and experience it. Collect and act on feedback from the target audience. This method saves time and money while validating an idea. 

Core functionality should take precedence over cosmetic features. A scaled-down version of the intended product will reveal whether the product is on the right track and will provide enough value in the long run. 

It enables software developers to make changes early, saving them from making significant changes later. The key to creating a good MVP is first to learn and then build a custom solution that caters to the practical side and is usable. 

8. Implement testing early

The software’s source code has a significant influence on a variety of programming choices. Every programming decision, especially in custom software development, adds to the cost of building the software product.  

Any error, no matter how minor, can accumulate over time and cause significant bottlenecks in the future. As a result, it’s critical to establish a quality control system and start testing every piece of code early in the development cycle. 

If you outsource your software project, ensure that your development partner has an extensive quality software control system. As your development team moves forward, keep in touch with them to see how they tested each piece of software code. 

9. Use open-source software (OSS)

Open-Source technologies are typically accessible and do not require licensing fees. OSS offers greater flexibility, security, and accountability than proprietary software solutions. Furthermore, this also has a long-life cycle and is always on the cutting edge of technology. 

The bottom line 

The crucial elements of the development process include adherence to good standards, adaptability, budget management, and developing the proper method of communication between the client and the vendor. Adopting best practices, lean development strategies, and choosing the outsourcing model helps to reduce costs.  

In addition to delivering high-quality software solutions, the ideal development agency will stick by you throughout the entire software development process, relieving you of the burden of worrying about software maintenance and upgrades. 

We at TECHVIFY know how to reduce software development costs while providing the best software development solutions for each industry. Contact us by email at [email protected] or call (+84)2477762666 if you want to turn your next business ideas into reality at reasonable prices. 

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