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There is no ideal time to implement a great idea. You cannot always be ready financially, logistically, or sometimes you can be short of time to build the product of your dreams. The harsh truth is that the competitive market can't wait until you have enough money, time, or an entire team to implement your idea perfectly. The reality challenges entrepreneurs all the time, and the pandemic and global recession are a recent confirmation of this.
Unfortunately, many great ideas fade into the darkness, poorly implemented or not realized.
As a Business Development Manager, I have helped numerous startups gather the right team for their businesses. From our experience in startup development, we have deduced specific rules and principles to follow to reduce IT costs. This article will highlight how you can reduce IT costs and come up with a great product.
IT Cost Reduction: What Factors to Consider?
So what is IT cost reduction? Obviously, the process of reducing development costs. In other words, cost reductions answer the question – how to produce a product item for smaller costs? But before we look at particular ways of IT cost reduction, I want to highlight three points for your consideration.
IT development is expensive
When talking about IT cost reduction, we mean reasonable optimization of costs by cutting unnecessary or abundant expenses. But the one thing that you need to accept and live on is IT development is still quite expensive. If you want a quality result, you need to be ready to pay a respective amount. The worst thing you can do for your business is slip into a blind economy.
In other words, you cannot expect to get an authentic Dior purse ordering it from Shein.
In the same way, you can’t expect quality work from a team of developers that cost nothing.
Cost Reduction ≠ Cheapness
Again, cost reduction does not have to turn into making a bargain at any cost. Before cutting the expenses, evaluate all risks, your main businesses' main benefits, and sales channels. In addition, every business is individual and has its own added value. So when trying to reduce IT costs, make sure that you are not "cutting" off your added value by cutting costs.
For example, if your product is not innovative, and its main value is user-friendly design, UI design is the last thing you should save money on.
Samely, when you promise total data protection to your users, saving up on the instruments for data protection will not be a wise solution for you.
Do you actually need to reduce costs?
We all know from school that productiveness means maximum work for minimum effort and resources. However, do you always need to cut costs when it comes to your business performance?
If you have a profit that covers the production costs, IT cost reduction is nothing more than an unnecessary effort. However, in my opinion, IT cost reduction is a viable solution for aspiring startups and small and medium businesses.
As for the startups, they are usually responsible to investors for the funds they raised. So reducing costs helps aspiring entrepreneurs to optimize expenses and build a compelling product within the budget limits they have.
5 Ways to Reduce IT Development Costs
So what are particular ways that you can reduce IT costs? Here are 5 the most popular ones:
Simplify the Design
When thinking about reducing the costs of development, design is one of the first options that come to mind. However, in the first stages of product development, you do not need to focus on the design too much. In particular, when you are building a Minimum Viable Product, the main principle is to make the simplest version of the product, which would perform the main functionality. The simpler design is, the less time the product development will take. Simplifying design can help you reduce up to 70% of the costs.
Also, the cost of your app design will depend on whether you have to build an app from scratch or need to redesign an existing app. Here is how the cost differ depending on the design complexity:
Outsource to a remote team
Another way you can reduce product development costs is by hiring a remote offshore team in Eastern Europe. Such a shift could help you considerably reduce costs and get qualitative work for a comparatively low hourly rate.
For example, outsourcing in the US will cost you about $100 - $180 per hour. The UK or German developers will bill about $60-$100 per hour. Outsourcing in Ukraine, you will be expected to pay about $35 - $50 per hour. That said, that will be quality and fast work.
Moreover, offshore outsourcing is an excellent choice if you want a self-manageable team with niche expertise and full involvement in the project. If you want to know more about what outsourcing can offer, read our article IT Outsourcing Guide: Definition, Types&Models, And Reasons To Outsource.
Shift to Digital Cloud
If you are running your business on a physical server, your excessive expenses might be. Moving your data to a digital cloud could save you thousands, eliminating expenses on-premises. In addition, you do not have to maintain or replace your hardware using cloud solutions. Instead, you can easily make all the settings’ adjustments whenever you want. Moreover, you can adjust your cost and usage as you scale your business.
Outsourcing is not the only way you can extend your team. For example, imagine that your main team is busy, but you need “hands” for your side project for completing the programming tasks for a short term.
Hiring a new team, you will have to handle all the employment duties: onboarding, providing insurance, and other social benefits for a short-term project that might be overbearing.
As for outsourcing, that might also be excessively much. When you outsource, you do not only work with developers. An outsourced team also includes project and product managers, designers, QA engineers.
In this case, staff augmentation turns out to be the perfect solution. By augmenting the team, you have all the control and guarantee that the team will only work for you.
Automation of processes
Sometimes working a little means working well enough. Instead of lots of manual work, you can do better by simply automatizing it once and for all. Here are the particular processes that you can automatize:
- Job scheduling (Connectteam, Humanity, Calendly);
- Recruiting process (Paradox, Seekout, Xor);
- Software Maintenance (Automation of Testing, Code Reviews, Production Monitoring)
- Invoice Management (pulling invoice data, generating invoices, tracking approvals, processing).
Automation replaces labor costs with software and configuration costs.
Wise IT cost reduction is an effective way to increase the effectiveness of your business. When you have budget restrictions or limited resources, reducing IT costs can be the lifebelt of your product. Outsourcing a remote team is one of the ways you can reduce costs without compromising the quality.
Uptech is a team of professionals with six-year expertise in product development. Check out our cases here.
Contact me if you want to learn how you can reduce costs for your business.