Developing a software product can be as unpredictable as building a custom car for a client with ever-changing demands. Consider a startup aiming to launch a fitness-tracking app with features like step counting, sleep monitoring, and meal planning integration. 

Initially, the project seemed straightforward, but vague requirements led to constant changes—adding a calorie-tracking AI, integrating wearables, and customizing dashboards mid-development. These shifts delayed the launch months and inflated the budget by 40%, leaving the team scrambling for additional funding.

So, how can you deal with such or a similar scenario? The answer is to manage and reduce costs where possible without compromising quality. This article provides an overview of the top 7 tips on how to reduce software development costs effectively.

#1 Set Requirements Using a Software Design Document (SDD)

You must understand that software product discovery sets a project on track or completely ruins it. Different startups and service providers create documents to define and control requirements, and you should do this as well. 

Invest your time in creating a Software Design Document (SDD)—a multi-level piece to categorize everything project-related. It consists of several elements that you should consider including in your documentation.

Define Product Requirements

Establish precise product requirements to minimize development costs. Start with a Product Requirements Document (PRD). This foundational document outlines the project's essential aspects and focus.

Business Objectives and Success Metrics

A useful PRD must include key business objectives and success metrics. 

• Business objectives – identify what you want to achieve with the software. Examples include improved customer engagement and streamlined operations. 

• Success metrics – set yourself quantifiable goals and realistic performance benchmarks. For example, you may want to increase user retention by 20%.

Target Audience and User Personas

Remember to identify and describe your ideal customer and target demographics for a solution.

• Create user personas to get an idea of who your perfect consumer is. For example, you may create a detailed description profile and focus on:

  • Age;

  • Gender;

  • Occupation;

  • Shopping habits;

  • Personal values.

• Select your core target demographic. These are people who share some characteristics relevant to your future solution. 

With this information, you can focus the project on what matters to your intended consumers and save money on unnecessary processes and features.

Functional and Non-Functional Requirements

You must outline specific characteristics your product should possess to bring business value to stakeholders. There are two groups of requirements:

• Functional requirements – they describe the product’s functionality and features. For example, a system must offer search results filters.

• Non-functional requirements – these are quality attributes that describe the solution. For example, a system should load within a specific time under regular traffic.

Align Stakeholders

Remember to host collaborative sessions with stakeholders to align the project’s objectives and validate its requirements. Tools like flowcharts and mockups provide additional clarity and reduce risks such as reworking the product.

Example of Our Product Requirement Document (PRD)

Check a PRD created for a telehealth company’s wearables solution, which outlines key problems, solution design, and goals for the project.

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Conduct a Feasibility Review or Audit Existing Solutions

To create a product from scratch, you should perform a feasibility review that includes:

• Leveraging technology stacks for business goals;

• Considering scalability;

• Identifying potential architectural and integrational challenges.

For an existing product, you want to perform an audit and focus on:

• Spotting bottlenecks in the system to fix them and improve performance;

• Identifying opportunities for optimization. For example, you can update legacy code or implement process automation;

• Pinpointing risks associated with outdated technologies. 

Example of Our Technical Audit

Look at a technical audit for an AI-powered meeting tracking software that includes a detailed analysis of the solution’s architecture and tech stack.

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Outline Engineering Requirements

Your next step is to create an Engineering Design Document (EDD). This document translates product requirements into technical plans and must include several elements.

Software Architecture and Tech Stack

You want to define your system’s architecture. The usual approaches include microservices architecture for modularity and flexibility or monolithic architecture for simplicity. 

Your selection of technologies should reflect the project’s goals. A tech stack can be quite flexible. Here are just several examples:

• Frontend – you can go with React or Angular to implement dynamic UIs;

• Backend – Node.js is great for asynchronous operations, while Django is better for rapid development;

• Database – PostgreSQL handles relational data, while MongoDB suits unstructured data.

Integration Plans

Don’t forget about third-party services and APIs. They are an effective and often cost-effective way to incorporate additional features and functionalities into a solution. For example:

• Payment gateways – Stripe and PayPal are excellent for handling secure transactions;

• Analytics – Google Analytics is one of the most popular options for tracking user behavior;

• Communication – Twilio can handle SMS notifications, and ChatGPT API is useful for creating AI assistants.

Scalability and Performance

Remember to plan the infrastructure to handle the growing user base and demands. There are different ways to achieve scalability.

• Containerization – you can implement it through Docker;

• Orchestration – Kubernetes is great for scalable deployments;

• Content Delivery Networks (CDNs) – services such as Cloudflare can reduce latency for international users.

Example of Our Engineering Design Document (EDD)

Check out an EDD for a customer portal MVP project that includes specifics regarding the technical implementation of the solution.

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UI/UX Audit

You want to optimize the user experience and minimize the risks of redesigning and associated costs, so a proper UI/UX audit is essential. Consider the following tools to visualize the solution’s structure and layout while logically organizing user flows:

• Wireframes – you can create low-fidelity designs to map out UI. For example, a login screen or main page for a web platform;

• User journeys – these diagrams showcase how users will interact with a solution. They can map different processes such as product search, checkout, etc.

Example of Our UI/UX Design Audit

Check out a UI/UX Design Audit for an HR consulting platform, which features a review of the solution’s user experience and interface design.

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Update SDD and Develop an MVP

Early cost estimates can be off by more than 40% if not continually updated. That is why proper documentation and planning are among the largest cost-saving factors for software development.

Remember to use SDD (and its parts described above) as a living document. It has to evolve along with the project and adapt to updates and changes accordingly. The SDD is an essential roadmap for business owners and developers alike. You can check out an example SDD used by DBB Software.

Example of Our SDD

Look at a complete SDD that combines previously mentioned elements to create a framework for running a project from start to finish.

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Companies often focus on MVP development to further reduce software development costs. It is the most basic version of a solution that includes only core functionality to appeal to early adopters and enter the market. Creating an MVP is a sure way to achieve considerable cost optimization in software development. Remember to:

• Prioritize core features that solve users’ most significant problems. This way, you can begin early market testing and save money;

• Avoid the so-called feature bloat. These are optional or unnecessary (at first) features that can be skipped to streamline the development process.

#2 Choose a Proper Technology Stack

The right stack is often an answer to how to reduce software development costs significantly. View the following technology stack options as examples of how you can choose something for your project.

Frameworks and Languages

You want to align the technology with your project’s requirements and your team’s expertise to minimize development time and licensing fees. So, you can aim for open-source technologies your team is familiar with. 

Here are some cost-effective and widely supported open-source frameworks with potential use cases for a better understanding of their application:

For example, a fintech startup wants to develop a dashboard for financial analytics. They will likely use React to create an interactive UI with Node.js for the backend. This way, they can rapidly develop the solution while setting grounds for scalability and adding new features.

Cloud Platforms

These solutions were created to enable cost-effective scalability and reliable infrastructure. Startups and enterprises often use cloud platforms for convenience and flexible pricing. Here is the breakdown of the best cloud platforms, potential use cases, and benefits:

An e-commerce platform will likely use AWS due to its advanced analytics tools and flexible storage options. This choice enables the company to manage hosting costs during seasonal traffic spikes.

Databases

You want to pick a DB most suitable for your data type. This way, you can access your business-critical information easily, avoid bottlenecks, and reduce downtimes. Some popular open-source DB examples include:

For example, a logistics company that handles dynamic data streams will likely use MongoDB as its database of choice. This solution will allow the company to adapt the database schema by introducing new tracking features.

You’re unsure about your project's tech stack?

Book a call with us for a free consultation. Our specialists will prepare a tech stack that’s perfect for your business needs.

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#3 Use Cost-Effective Development Approaches

You want to track key performance metrics of your project to measure its cost-effectiveness and alignment with business goals. By monitoring these indicators, you can quickly identify potential areas for improvement while maintaining financial control over the solution. Here are some tips:

1. Remember outcomes, not just outputs – you want to assess the impact of delivered features. Measure how a new functionality improves user engagement or generates revenue. Consider scaling the feature back or cutting it if there's no impact.

2. Time-to-market – faster launch translates into quicker ROI generation. Look for potential bottlenecks if your time-to-market is not satisfactory. Different ways to solve them, such as automated CI/CD pipelines, can shave weeks off the timeline.

3. Analyze feature costs – calculate the cost of developing each feature. If a feature requires disproportionate resources, think about how you can simplify it or it’s necessary. For example, a company may use a rules-based model instead of an AI-powered recommendation system to lower the development cost and speed up the release.

4. Consider post-launch expenses – regularly review ongoing operational costs like hosting, support, and updates. You can identify areas for improvement through small things like smart server usage during non-peak hours.

5. Keep an eye on scalability – you want a scalable architecture, but some growth forecasts may never realize. To avoid this pitfall, measure scalability based on realistic growth projects. You can use scalable cloud solutions like AWS or Azure to adjust costs based on actual scale instead of potentially over-provisioning resources.

6. Improve through feedback – set up feedback loops and gather metrics to identify potential setbacks and refine processes. For example, increasing cost per sprint may indicate planning or execution inefficiencies. Timely identification of these problems lowers the likelihood of cost escalation in the future.

#4 Optimize the Development Process

You have access to numerous ways of optimizing the development process. The primary and most effective ways are through proven methodologies and quality assurance techniques. 

Agile Methodology Implementation

Agile methodology is a staple approach to the majority of software development projects. It promotes transparency, teamwork, and adaptability for timely issue resolution. These factors positively affect the working environment and effectively reduce development delays. 

The DBB Software team uses an iterative process to streamline projects and optimize recurring tasks like planning, reviews, release planning, check-ins, and meetings. The infographic below explains our sprints.

Tools for Collaboration and Management

You need to establish communication channels. Collaboration tools are crucial for effective communication and management, which translates into an undisrupted development process. For example, our team uses the following instruments as they have proved to be effective:

• Slack – easy-to-use primary communication platform for the company’s internal employees that features instant messaging and video calls;

• GitLab – our main task management tool. We use it to track progress, organize time, and keep track of project status.

Early Problem Detection and Resolution

Proactive testing and feedback loops are highly effective for identifying and addressing issues early in development. The earlier you spot a problem and deal with it, the less additional work the team will have to do in the future. You should use both communicative and technical methods for this purpose.

• Establish feedback loops with stakeholders to stay on the same track during the development;

• Implement Continuous Integration and Continuous Deployment (CI/CD) pipelines to detect and solve problems as early as possible.

Code Quality

Consider this – fixing errors after release can cost 4 to 5 times more than during the design phase, and even up to 100 more for maintenance! The reasons for such potential expenses are simple – poor-quality code can lead to endless debugging cycles, post-launch maintenance headaches, and even expensive reworks if foundational issues aren’t caught early.

Testing and code quality are the best ways to lower development costs without sacrificing performance. You can minimize these risks and ensure your software is scalable and maintainable. There are various manual and automated tools available for these tasks.

Based on experience, our team devised a list of highly effective testing and code quality tools that we also included in our Pre-Built Solutions:

• Web apps:

  • Cypress – a great tool for E2E testing that runs directly in the browser and is known for its speed and reliability;

  • Playwright – a testing framework that supports all the available browsers. It can execute tests in parallel across multiple browsers, significantly reducing testing time by up to 4 times compared to single-browser testing.

• Mobile apps:

  • Detox – an open-open source E2E testing framework designed for React Native apps that runs tests synchronously and supports both Android and iOS platforms.

• Code quality:

  • ESLint – a linting utility that helps identify and fix problems in JavaScript code before it’s deployed;

  • Prettier – an opinionated code formatting that automatically formats code to follow a consistent style;

  • SonarCloud – cloud-based code quality and security service that helps detect and fix bugs, vulnerabilities, and code smells in software projects.

#5 Optimize Resource Allocation

Resource allocation is a key to effective development cost reduction. There are several ways to achieve this, including an optimized team structure and development tools for automation.

Team Structure

You want to optimize your team structure to reduce development costs without sacrificing quality. As a rule of thumb, it is advisable to assemble a right-sized team to address the project’s needs while maintaining flexibility. The idea is to assign specific tasks to people with appropriate expertise. 

For example, junior engineers can handle routing coding tasks like adding basic features or writing unit tests, while senior developers can focus on designing system architecture and solving technical problems. Such distribution of tasks is an example of effective use of human resources.

At DBB Software, we approach projects with flexibility and scalability in mind. Instead of dedicated teams for mobile and web application development projects, we use a flexible team structure through Pre-Built Solutions. 

Let’s consider a scenario where we need to help a startup by developing a solution for web and mobile users. Traditionally, each platform requires a separate team of developers. However, we can approach this situation differently:

• By using React for the web app and React Native for mobile, a single unified team can handle both versions, dramatically lowering development time and costs, while allowing us to work on 2-3 projects simultaneously;

• Using readily available components like authentication modules or UI elements eliminates the need to start from scratch, saving weeks of development effort.

This example shows that you can focus on creating flexible and multi-skilled teams. The use of shared tools and technologies will enable you to significantly reduce software development costs while maintaining team agility to adapt to evolving project needs. 

Development Tools and Automation

It’s hard to underestimate the impact of process automation. Businesses that want to know how to reduce software development costs should consider various automation tools available on the market.

• Docker – it simplifies app deployment via the creation of consistent environments, reducing the time developers spend on setup and debugging;

• CI/CD pipelines – they automate building, testing, and deployment processes, enabling more reliable releases with little human intervention.

Optimize Your Cost by Up to 50%.

Reach out to us to find out how to reduce software development costs and team size while maintaining consistent quality and results using our expertise and DBBS Pre-Built Solutions.

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#6 Focus on Long-Term Cost Reduction

The initial development phase is often the biggest cost in a project, but it’s not the only expense to consider. Product lifecycle costs, like maintenance and scalability, can add up over time. To save money in the long run, it’s crucial to plan for these factors from the start, ensuring your software is easy to maintain and scale as your needs grow.

Maintenance Planning

An effective way to reduce maintenance costs is through a solid maintenance strategy that has to include proactive and reactive maintenance approaches:

• Proactive maintenance – the part a team has the most control over. It includes regular updates and patch deployment to keep solutions secure and compatible;

• Reactive maintenance – this is emergency maintenance for addressing emergencies and critical vulnerabilities. It is costly, but proper proactive measures can minimize this risk.

Scalability Considerations

Scalable and flexible infrastructure is a key ingredient of cost management. Properly planned infrastructure can ensure product growth and reduce the need for costly overhauls and changes.

Future-Proof Architecture

• Microservices design – this architecture approach divides systems into feature components that can scale independently;

• API-first design – this approach puts APIs as the foundational components of a solution to integrate it with new tools and services seamlessly.

Flexible Infrastructure Planning

• Cloud services – solutions like AWS Auto Scaling, Google Cloud Compute Engine, and Azure Virtual Machines are great for matching resource use with demand. 

• DBs – focus on tested scalable options that include Amazon RDS, MongoDB, AWS OpenSearch/ElasticSearch, DynamoDB, and Redis/Memcached.

• Load balancing – tools like AWS Elastic Load Balancing and Google Cloud Load Balancer evenly distribute traffic to handle load spikes and peaks.

#7 Measure Success

You want to track key performance metrics of your project to measure its cost-effectiveness and alignment with business goals. By monitoring these indicators, you can quickly identify potential areas for improvement while maintaining financial control over the solution. Here are some tips:

1. Remember outcomes, not just outputs – you want to assess the impact of delivered features. Measure how a new functionality improves user engagement or generates revenue. Consider scaling the feature back or cutting it if there's no impact.

2. Time-to-market – faster launch translates into quicker ROI generation. Look for potential bottlenecks if your time-to-market is not satisfactory. Different ways to solve them, such as automated CI/CD pipelines, can shave weeks off the timeline.

3. Analyze feature costs – calculate the cost of developing each feature. If a feature requires disproportionate resources, think about how you can simplify it or it’s necessary. For example, a company may use a rules-based model instead of an AI-powered recommendation system to lower the development cost and speed up the release.

4. Consider post-launch expenses – regularly review ongoing operational costs like hosting, support, and updates. You can identify areas for improvement through small things like smart server usage during non-peak hours.

5. Keep an eye on scalability – you want a scalable architecture, but some growth forecasts may never realize. To avoid this pitfall, measure scalability based on realistic growth projects. You can use scalable cloud solutions like AWS or Azure to adjust costs based on actual scale instead of potentially over-provisioning resources.

6. Improve through feedback – set up feedback loops and gather metrics to identify potential setbacks and refine processes. For example, increasing cost per sprint may indicate planning or execution inefficiencies. Timely identification of these problems lowers the likelihood of cost escalation in the future.

Conclusion

The answer to the question of how to reduce software development costs is a multi-level one. You want to: 

• Set requirements and do some strategic planning;

• Select a proper tech stack;

• Use cost-effective development approaches;

• Follow the agile approach and pick the best communication tools;

• Optimize resource usage;

•  Consider long-term costs;

• Set measurable success criteria.

Software cost optimization is a lot to take in, and DBB Software can assist you with cost-efficient product development up to 50% faster. Contact us for a free consultation and learn more about our approach.

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