How to optimize costs and flexibility

01 INTRO

When done right, software is one of the greatest assets you can have. An asset that will amplify your profits like nothing else in recent history.

Software is the great multiplier. To harness its full potential, first you have to put something into it.

Would you pay someone 100 EUR if it meant you’d get back 120 EUR? – Absolutely.

But, as in any equation, the numbers must add up.

03 On money, time and function

It must be in budget, on time and bring money

Developing software means balancing three important things: budget, functionalities and deadlines. These factors are all interconnected and making the right choices can make a big difference in your software project’s success.

Pricing the software

One of the key decisions in software development is how to price the project. Software companies typically offer two main options:

1. Fixed budget model

In this approach, the software company provides a fixed price for the entire project. But, they include a buffer for unexpected changes or delays. It’s like agreeing on a set cost for the entire journey. This option provides clarity about the total expenses, but it limits your flexibility.

For example, for a project that costs 128,000 EUR, the software company will charge you 160,000 EUR. You’re not flexible, you’re overcharged and you risk getting a suboptimal solution because you need to plan everything beforehand. Don’t go judging the software company, they must insure they will not be losing money on this project.

2. Pay-As-You-Go model

Alternatively, you can opt for a model where you pay only for the hours invested in your project on a monthly basis.

You agree on a monthly budget and set a deadline. This way you can estimate the total price and plan your finances. There is no hidden buffers or extra costs.

Imagine we have agreed on a monthly budget of 16,000 EUR and project deadline is in 8 months. Within just 3 months, you will receive the first version of your software. You can now test it, evaluate and make adjustments on the go.

Result? You will spend less than if you went with a fixed budget (around 128,000 EUR total). And because you have tested early and made adjustments, you are 100% sure that the software does exactly what you need and brings you profit.

The challenge of predicting timelines

Estimating how long a software project will take is often compared to predicting the weather a year from now. It’s challenging because software development is a complex process with many variables.

Unexpected changes are part of the game and even the most meticulous planning can’t eliminate all uncertainties.

It’s what all the experts in the field will tell you.

In both pricing models, the focus is on delivering a successful software product within the budget and timeline constraints. The choice between a fixed budget and a pay-as-you-go model depends on your project’s specific needs and your comfort level with flexibility. However, we strongly suggest you choose the pay-as-you-go model, since it ensures you pay only for the time that you actually used up. Even if the estimate was off.

But, how do you ensure development doesn’t drag on and become too expensive?

The key lies in finding a dependable software development partner.