Is there any way of lowering project costs?

Is there any way of lowering project costs?

August 6, 2012

The success of modern companies depends to a large degree on new technologies, which provide competitive advantages. Introducing these technologies should be seen as an important investment in the company's future.

Software development is a labour intensive process, which requires time and financial expense. It is not uncommon for actual project costs to exceed initial expectations or even the budget limit. It is important to bear in mind that if you select a budget contractor purely to reduce costs, you will be compromising on quality when it comes to the end product.

We believe that good results of intellectual activity are worth paying for. Once a product has been released to a client, EDISON will not seek to gain profit from its deployment, although these profits are often ten to a hundred times higher than the original cost of implementation.

The success of a software development project depends on the following key factors:

01 Swiss knife Whether the contractor has experience and a good reputation.
02 Man and diagramm on board Smart project management.
03 Aim Whether there is a clearly defined project aim or target.
04 Development in monitor A proper choice of technologies and frameworks.
05 Team Whether the contractor has a qualified team of developers.
06 Man and check mark Whether there is a sufficient number of specialists working on a given project.
07 First place on winners pedestal Team member motivation to implement a successful project.
08 Clock Whether there is enough time and flexibility of timeframes.
09 Numbered stages Breaking the project up into stages according to the given timeframe.
10 Development on briefcase Whether the contractor has material and technical resources.
11 Dollar and checklist A balanced but comprehensive cost assessment of all resources to be used in project work.
12 Chemistry tubes and disk in box An efficient procedure of project implementation and testing.

Clients should we wary of large discounts offered by software companies. In a number of countries, the size of these discounts is even regulated by law. When we ourselves purchase goods and services from other companies, we understand that a fair price corresponds to better quality. If project costs can be significantly reduced, this usually means that the initial prices quoted were exaggerated to indicate a misleading or false quality standard.

Besides cost, one should consider the other eleven factors mentioned above. Not all of these factors are the sole responsibility of the contractor and the client should expect to play a contributing role in any given project.

Overall project costs also depend on the following factors:

  • Complexity (scale) of the project
  • Availability of necessary information
  • Need to conduct market research and other types of information gathering
  • Need to involve additional experts

Problems often arise as a result of changes to initial product requirements or the appearance of new requirements. Introducing some corrections or alterations to existing products or those being created is possible, but this increases the risk of going over budget.

In management theory, there is a classical project triangle, which has three words written on its sides: quality, time and cost. If we follow this principle, the dialogue below emerges:

  • If we set the volume of work and lower the cost, then the other sides of the triangle will inevitably change (due date and/or quality).
  • By reducing the size of the triangle (the volume of work), we can shorten all sides or some sides selectively.
  • To make a correct and symmetrical triangle, all of its sides should be of the same length.
Medal, dollar, clock

The budget for a development project can also be reduced by using the time-based payment plan, for which there will be no uncertainty coefficient.