How to Reduce Software Development Costs in 2021
Technology companies and other organizations can face a number of realities throughout their lifespans.
- Unemployment and underemployment
- Uncertainty over the economy
- Crumbling of industries
- Increased customer churn
Unfortunately, COVID has unleashed each of these realities at once. And while they’re widely out of your control, there are some things you can do to improve your position in the market. These things typically fall under one of these basic strategies.
- Make more money
- Spend less money
There are many opportunities to increase revenue during a time of economic downturn, however, they all have their own set of challenges.
Reducing costs, on the other hand, is a bit more straightforward. You can:
- Reduce staff
- Reduce salaries and benefits
- Reduce other expenses
Since we can all agree that reducing staff and/or salaries should be a last resort, you should probably start with your operating costs. Without further ado, here are the most common software expenses that can be trimmed now or gradually throughout 2021.
DevOps Costs (and all environments)
There’s a good chance you’re running servers and databases you don’t need or your dev/staging environments are bigger/more powerful than they need to be.
Review each of these environments each month and have conversions around each instance’s expenses and the ROI they bring your organization.
Customer Service Costs
Responding to customers in a timely manner can improve retention, but it’s not scaleable. To reduce these customer service expenses, at the least, implement FAQs.
Even better, chatbots can (depending on their technology) be easily integrated to answer users’ questions before they get to customer service. An average chatbot can cost as little as $5,000, a massive cost-saving initiative you can implement quickly.
Disclaimer: The following three initiatives could be a massive undertaking depending on your technology. However, we’re recommending them because we’ve seen, in many cases, there tend to be a few ‘problem areas’ that can be focused on.
If you can identify and update just these problem areas, the cost can be relatively low with large benefits.
Remember: 90% of issues are usually found in 10% of the code.
Move Code to Serverless or Managed Cloud Solutions
Based on your software usage (evenings, mornings, or steady concurrent users), you might benefit from a serverless approach. With this setup, you only pay for bandwidth when your users need it.
Tackle ‘Soft’ Maintenance Costs
How long does it take your development team to apply security patches and package updates? If you’re operating in an old technology or framework, these things tend to take much longer. It may be time to rewrite sections of your technology into a newer framework that’s easier to update.
Technical Debt and Bug Fixes
If your code isn’t clean and easy to understand, your team will need to band-aid (technical debt) bugs, or take extra time to fix/add simple features. It might be time to start breaking off parts of your code and rewriting it. This can help you save money in the short term (as pieces get re-written and need less maintenance) and when things go “back to normal.” You’ll be in a more competitive position overall if you took smart moves in 2021.
Improving your product or service should always be a part of your roadmap, but often we neglect improving operational efficiencies. If your software company needs to reduce costs, the above places are the best places to start. If you need more custom advice on where to reduce expenses or increase investments, contact the team at Devetry. We can take a look at your technology and organizational structure and help you make a plan that prioritizes ROI.