However, this shouldn’t just mean cutting your IT budgets, or putting your digital transformation on hold. Quite the contrary – you should be accelerating the digitalisation of your business and try to foster innovation within your company, all the while simultaneously optimising your costs.

So, how can you approach this wisely?

5 steps to effective cost optimisation

First and foremost, you need to determine how much software development is currently costing you. Include everything – from salaries to infrastructure. You should have some solid benchmarks in place to help you identify profitable opportunities and for making smart comparisons later. Only then will you be able to run the profound analysis that you need to create a good plan. You can use a free Total Cost of Ownership template.

1. Assess your internal environment

Assessing your processes and resources will allow you to establish your current level of efficiency. Focus on your weakest links first – the bottlenecks that suppress software delivery. This may be associated with a lack of automation, insufficient human resources, bad communication, outdated tools and technologies, counter-productive methodologies, etc. You need to have a clear view of the things that you’re doing right, as well as the things that need to be improved.

2. Analyse your connections

You are connected to a number of external service providers and partners, not to mention your own customers. Some of your collaborations may not be as effective as you think, or you may be paying for subscriptions that you don’t need anymore. You could also be focusing on too many target groups while developing your software solutions, making it too extensive and complicated. It’s important to identify all of the areas that generate needless expenditures.

3. Make a plan

After you’ve finished with the first two steps, you’ll have a full picture of your situation, and you can start looking into cost-optimisation opportunities. You’ll probably find some minor modifications that can be made immediately (like getting rid of unnecessary services that you are still paying for), while other improvements may take much more time and effort to find and implement (like adapting Agile methodologies in your software development). Of course, there are a few things to consider beforehand, such as:

• Will the changes that you are going to make have an impact on your customers?
  
• How long will the adaptation period take?
  
• Will it affect any other areas of your business?

It’s important to analyse all of these factors, set your priorities and create a schedule or timeline. Also, remember that big changes may require you to invest some time and money immediately in order to enjoy significant savings later on.

4. Execute your plan

Once your plan is ready – it’s time for execution. So, make sure that your employees (not just your development team) are familiar with what you want to change – especially those who will directly experience the effects of the modifications. First, assign responsibility for implementing particular changes, and then proceed with the general implementation, taking it one step at a time. Don’t rush with transformation – give yourselves some time buffers that will allow you to check on the progress of your plan and react whenever necessary.

5. Monitor your progress

And last but not least – keep your fingers on the pulse and be sure to compare your results with the benchmarks that you set up earlier. Just remember to stick to the metrics that are actually comparable. If at any point you observe that your plan needs modifications, adjust it to the current situation. Priorities may change over time, and you could also find yourselves in a situation that was hard to predict in advance. A certain level of flexibility is definitely required here.

Popular cost-optimisation initiatives

When it comes to cost-optimisation ideas and actions, many companies usually choose to proceed with one — or a few — of the following:

• Simple reduction of spendings – like cutting down on services that are not absolutely necessary.
  
• Process automation – reducing the time spent on doing repetitive tasks by automating them.
  
• Business outsourcing – cooperating with an external IT software company that will either take care of part of the development process, or all of it.
  
• Implementing DevOps – for better performance, optimised processes, faster delivery and smoother collaboration between developers, other team members and stakeholders.
  
• Utilising existing solutions – this is instead of building resource-consuming systems of your own; for example, you could utilise cloud solutions, ERPs or CRMs.
  
• Focus on innovations – get rid of any legacy systems that are slowing you down. Instead, try to foster innovation that will allow you to work more effectively, without wasting precious time and energy.
  
• Early testing for products and services – this allows you to react and make adjustments quickly, so you can avoid having to fix large bugs or make significant changes after a final product or service is supposed to be ready.

Final thoughts

Sometimes, making even the tiniest changes can result in significant savings. Small things add up, and they can make a huge difference — not to mention the big things. That’s why it’s so important to run a thorough IT department screening, so you know exactly what needs to be improved. And focusing on cost-optimisation operations can also bring a number of additional benefits, such as enhancing the company’s overall performance, becoming more innovative, or finding new business opportunities.

If you want to talk about how to optimise the costs of your software development and how to make the most of it, don’t hesitate to contact us.