Digital technology allows for organization that boosts productivity and creates stronger engagement with customers. Despite this, however, many tech initiatives are still seeing costs overrun, which damages the bottom line and undermines the value of software development.
Estimating costs isn’t easy. Companies need to take into account human resources, user requirements, application features, infrastructure, and the costs associated with coding in a specific language. A smart development budget needs a forward-thinking approach to project planning, a strong vision of the software’s purpose, and the software’s ability to deliver when it comes to business goals.
Sometimes, when it comes to developing a software development budget, you need to go back to the drawing board and rethink how to fund your IT efforts. In an effort to avoid this, we’re sharing some practical tips for making an effective software development budget in 2020.
First off, consider agile methodologies. Agile is a collaborative, iterative approach to software development. In an agile approach, engineers undergo multiple sprints to rapidly produce a minimum viable product (MVP) that delivers business value. In terms of a development budget, agile translates to smaller payments per iteration instead of larger sums at set intervals.
Quality assurance is a big part of agile development. Early problem detection lessens the costs that are associated with a buggy code in production. Agile also allows for a more comprehensive focus on collaboration and communication. In turn, this lets business leaders see where the budget needs to be tweaked, and, which decisions can better ensure that the project reaches the right objectives.
In agile development, “velocity” speaks to the time needed to perform work in each sprint. Each individual piece of work – like adding a function or designing a single page – is known as a “work unit”.
When devising a smart software development budget, the budget should be based around how many work units the development team can complete in each sprint. Ultimately, this will help determine how long it takes for every iteration of the project, which will help predict the team velocity and overall cost of the project.
When you understand how much each sprint is going to cost, it’s a good idea to look for the best-case, worst-case, and most likely cost scenarios. If, for example, the worst case scenario involves doing eight sprints, the most likely scenario involves doing six sprints, and the best case scenario is four, you need to take these estimations into account. It can help to take your team’s experience and the accuracy of past estimations into account. The more mature and experienced your team is, the more accurate your estimations should be. It’s important to not use the same velocity metric across different teams and projects.
If you’re involving peers from different functional areas, know that their knowledge of agile might be low or even nonexistent. They may want to use estimates to request fixed bid contracts from vendors, thinking this may be lower cost or more predictable. However, most failed projects and blown software development budgets occur because of this. Every piece of software is a unique endeavor. As such, it’s hard to predict the cost and duration of every feature with 100% accuracy.
In developing a software development budget, it can be helpful to plan ahead and prioritize essential features. If you’re budgeting for brand-new deployment or the improvement of a pre-existing platform, you should prioritize features and functionality that will serve to guide the project in the short term.
When you are creating an MVP, there is an extreme emphasis on “M” as in “minimum.” Keep things simple by making the most essential aspects of the software the top priority, and creating a budget for them accordingly.
In planning, produce design ideas and wireframes – or just examples – of competitors’ products. This helps give developers a good idea of how the software should look, feel, and function. Additionally, the process will help link functionality to more tangible business benefits.
Also, it can be extremely helpful to consider the benefits of partners. KitelyTech has years of experience in the tech sector. We work with entrepreneurs across a wide range of different industries, making their technical solutions and platforms possible. Contact KitelyTech today to learn more about how we can augment your business and help it stand apart from the crowd.