Budgeting is an integral part of a software development project and effective project management ensures that not only is the delivery of a software timely, but is also within budget. A major component of the triple constraint, the cost can be the deciding factor of whether the company wishes to go ahead with the project or not.

From the trinity of cost-schedule-scope, costs drive all other factors. A company that ensures that the project is of high quality, is delivered in time and is under budget will be highly sought after.

Usually, as a project is envisioned and scheduled, the costs of the project are variable and the durations fixed. However, as soon as the budget is approved, the cost of the project becomes the utmost priority. The reason for this is that once costs for the project are approved it can be challenging to get the program sponsor to increase the budget. The effort is then shifted to focus on reducing costs to stay under budget.

The cost efforts are then employed at the project level where cost-schedule-scope remains in equilibrium and the project manager has the authority to make necessary adjustments.

Costs of a project can be an in-house or third party. Recurring third-party costs, however, is challenging. The first and foremost method to reduce project costs is to find cheaper contracts.

Soliciting proposals from not one, but several bidders can help you keep costs down, ensuring that you receive maximum value for your set amount. Negotiation with finalized bidders can also drive costs down, however, reduction in cost should not directly impact quality.

In-house cost reductions are many. In a project that is cloud-based, the following can help you reduce costs:

Third party integration tools:

Cloud-based third-party integration tools are often contracted to be used on a pay-per-use basis. Using the live server for approved updates and using the dev servers for final testing only can reduce costs. Using simulators can drive costs even lower. Using dev, beta and test servers for fixed intervals can curb unnecessary payouts to third-party providers.

Notification services:

SMS messages and e-mails are increasingly being used for notifying users about any changes made to the system or for validating changes they make. Triggering SMS messages and e-mails only when needed prior to final deployment can curb unnecessary spending.

External support services:

Supportive services that help you run an application should not be always on in test environments. Using local machines and running simulators can help reduce costs for external support services.

Backups:

Live backups and skeletal backup services can significantly increase costs. As backups require space, they can significantly increase the disk usage of the server, raking up costs for scalable systems that are billed dynamically. Live backups should only be used for production servers. Clearing the backup history of live servers after a month can also help clear up old, unwanted data. This data can, however, be stored in the system using an offline backup system.

Reducing deliverable frequency:

Providing the customer with only key items instead of each iterative item can reduce costs drastically. If the client is only offered products at fixed milestones, for example when a Proof-of-concept is created or when a minimum-viability-product is ready. Multiple iterations being deployed to live servers cost a lot and can rake up bandwidth, space, and other third-party pay-per-use costs.

Contingency planning:

Risk Management planning is a very important part of project planning. Contingency plans are always prepared to deal with risks that may have a high impact but have a low probability of occurrence. Mitigation plans are prepared for risks that have a higher impact and a high probability of occurrence. Essentially, you need to prepare better risk management plans for items with a higher impact.

Constant tracking:

Looking after your project is essential. What is not quantified cannot be improved. All tasks must be tracked constantly to ensure the highest standards of quality and to plug any leaks.

Outsourcing non-core capabilities:

We know ourselves the best. If you find a vendor that can offer the solution you want at a lower cost-to-market rate than you can yourself, outsource that solution if it does not impact quality.

Automating project management:

A recent report by Software Advice stated that nearly 60 percent of small businesses were still using manual methods, no project management software or nothing at all to manage projects. While there is an upfront cost for PM tools, the long-term benefits eventually outweigh the actual costs that businesses incur due to manual methods. Automated project management ensures optimal utilization of resources, automates and organizes processes and ensures that deadlines are met.

Move to Agile processes:

Agile processes can help organizations of all sizes and all departments to be able to respond to constituents quickly as they are directly connected to them. Agile helps SMBs achieve more with less. With a constant view of the distance from deliverable, you can ensure that you are able to manage to keep your project under budget, yet within timelines.

Not being able to achieve cost-schedule-scope goals requires making changes at the business level of authority, and that requires approval from key stakeholders, e.g. project sponsors. Understanding and applying the project-level and/or business-level tools of the trade for decreasing cost is an important activity for all projects and all companies that wish to keep the ongoing costs of development low.