Smart moves for software development cost optimization: Cut costs, not corners

Our portfolio is packed with cost optimization wins, and these client results showcase the strategies we’re sharing below. 

“The vendor’s contributions have led to significant improvements and measurable success across several key areas: 

• 50 percent reduction in Salesforce license costs: By optimizing the use of Salesforce Platform licenses, the vendor helped reduce overall licensing costs by 50 percent, resulting in substantial savings. 

• Improved employee satisfaction: The enhancements and streamlined processes within Salesforce have improved employee satisfaction scores, reflecting increased efficiency and usability for end users. 

• Increased funnel conversion rate: The integration work and improvements in the Salesforce Org contributed to an increased funnel conversion rate, demonstrating enhanced customer engagement and business growth.”

“We needed to build a complex recruitment application for a client. As a young company, we wanted to avoid the costs of hiring in-house developers, so we reached out to Vention to create an MVP based on our specifications. 

With the first version complete, we're currently in the process of outlining the second and third iterations. We vetted between 20–30 offshore companies, but weren’t happy with any of them. Vention was referred to us by a business colleague. We were impressed by their portfolio.  

We also appreciated that Vention provided a detailed project outline. They made a spreadsheet that gave a clear outline of phase requirements and a cost breakdown.”

“What were the measurable outcomes from the project that demonstrate progress or success? 

Utilization of features by users, reduction in costs, and efficiency gains. 

They adapted to any circumstance of more or less guidance and always delivered on time and within reasonable boundaries.” 

And if you want a closer look at the specific steps, we took to optimize software development costs, here are more stories: 

Sperry Rail partnered with us for a product discovery workshop and rapid delivery of prototypes, technical specs, risk assessments, and a roadmap for future planning and budgeting. 

The result? As Bobby Gilbert, Senior Director of Digital Transformation at Sperry Rail, said, "Vention truly challenged our thinking: This PDW was the first time I've seen a complex software project finish under budget and ahead of schedule."

Helping EliseAI turn leads into leases, boost conversions by 125 percent, and free up 90 percent of leasing teams’ time, we delivered: 

• Database performance optimization to cut costs and improve efficiency. 

• Seamless integration of property management platforms and development of AI-powered automated replies. 

• A robust testing framework to accelerate bug fixes and enhance code quality.

To support RethinkFirst in better-serving thousands of clients globally, including nearly one-third of Fortune 100 corporations, we: 

• Redesigned the frontend for a smoother user experience. 

• Created a unified UI library for faster feature rollouts. 

• Migrated billing and scheduling to microservices to increase scalability and reduce software development costs. 

Impressed? Read on for a detailed action plan to achieve effective software development cost optimization.

When planning budgets, the immediate costs that come to mind are the salaries of in-house designers, architects, developers, DevOps engineers, and QA specialists — or the costs of outsourcing software development.  

(You can get a ballpark estimate for outsourcing your project to Vention using our free project cost calculator.) 

A close second is hardware expenses like the cost of computers and servers. 

But beyond these, there are hidden software development costs that can quietly pile up, straining your budget if left unaccounted for: 

• License fees, including any paid development tools and libraries, project management, and collaboration platforms.  

• Cloud storage and computing costs: Even with the best-fitting cloud plan and pay-as-you-go pricing, your budget should reserve a specific — and usually quite a significant — amount. According to Flexera’s 2024 State of the Cloud report, 34 percent of enterprises spend between $2.4M and $12M on public cloud annually. The spending is smaller for small and midsized businesses: 36 percent pay less than $600K annually. 

• Hosting costs: Publishing apps on platforms like Google Play or Apple Store includes fees and a shared revenue percentage. 

And what hidden software development costs should be considered? 

• The cost of scope creep. Say you decide in the middle of your project to integrate payment functionality into your app. Will your budget cover the integration costs or third-party API fees? Not to mention the cost of rework your development team will face. 

• Overstaffing. You face this risk if you have an internal development team. With any outsourcing option, you can easily scale the team up and down based on demand. However, internal teams are rigid, and if your developers don’t have enough workload at a particular project development stage, you won’t fire them but continue to pay their salaries. 

• Maintenance costs. Your software's story never stops with its launch. You may need to pay the technical debt (the compromises you once made between software quality and development speed), apply software updates and security patches to avoid vulnerabilities or add new features to keep up with evolving user needs or competition.

• Compliance costs. Compliance is especially crucial for regulated industries like healthcare, banking, finance, and insurance (BFSI). It requires continuous security investments, regulatory research, and ongoing monitoring of evolving standards. 

• The cost of rework: IBM research from 2002 highlighted that the later a bug is found, the more expensive it is to fix. Even today, delayed fixes can drive costs up significantly, making early detection crucial for cost efficiency.

• Integration and compatibility issues: You may need to adjust the solution or devise tricky workarounds to make your software compatible with legacy systems or third-party tools. 

Unexpected expenses are inevitable due to changing stakeholder requirements, shifting market conditions, or unforeseen technical challenges. A contingency budget won’t eliminate all risks, but it can help mitigate surprises and keep your project on track.

Achieving cost efficiency at every stage of the SDLC is crucial for maximizing value without compromising quality. Our specialists bring you time-tested strategies designed to streamline processes, minimize waste, and ensure sustainable success.

Quick stats: Standish Group's report suggests projects with a defined discovery phase have a 28 percent higher success rate. Here’s how Uladzislau Antsipin, Technical Manager at Vention, comments this:

What other strategies during the discovery stage have proved their value? 

Check feasibility 

Filter out unfeasible ideas early and save yourself from wasted investments. Feasibility issues typically fall into three categories: 

• Technical feasibility: Can the required technologies work together? For example, outdated software versions might not be compatible, causing unexpected delays or failures. 

• Financial feasibility: Is the cost justified? Some proprietary technologies or infrastructure upgrades might be expensive with no promises of clear ROI.

• Operational feasibility: Do all the planned features align with your organization’s workflows or user needs? For instance, a feature might sound great but could disrupt existing operations or fail to add real value.

As you can see, feasibility analysis not only prevents you from being stuck with an unfinished project but also helps you make wise choices — like focusing only on features your users truly need and skipping unnecessary extras that waste time and money. 

Beat scope creep with a bulletproof SRS

A well-crafted software requirements specification (SRS) is your antidote to any scope creep. This document acts as your project’s north star, clearly defining the features to deliver and the requirements to meet during development. Think of it as a contract that aligns everyone with what success looks like — no surprises, no budget blowouts. 

Easier said than done, though. On the way to an SRS, you’ll handle a dozen complex tasks like defining your target audience groups and their needs and sorting through conflicting stakeholder priorities to nail down what’s essential. 

But the result is really rewarding. You’ll have an official document — every stakeholder’s commitment to their expectations about the project — which will save you from last-minute changes that can boost the budget. 

Tackle the speed challenge 

In the software development world, tight deadlines are the norm. Everyone wants the shortest time-to-market to stay ahead of the competition. The obvious solution? To involve a bigger development team. But more people mean higher operational costs, and that’s not always ideal. 

Here’s a smarter alternative: start with MVP development. With a minimum viable product, you launch the essentials — just enough to meet user needs. This gets you to market faster and reduces the likelihood of costly rework later, as MVPs are built to gather feedback from real users, helping you refine and evolve your product. 

The best part? As your MVP grows into a full-scale product, your investments are spread over time, keeping development efficient, budget-friendly, and laser-focused on what your users really want.

Quick stats: Forrester once estimated that every dollar invested in UX yields 100 dollars in return. Even if the exact numbers have shifted over time, the principle remains the same: investing in UX delivers significant value. 

Opt for modular and scalable design 

When using cloud resources on a pay-as-you-go basis, your chosen architecture can significantly impact costs long-term. Opting for a modular, scalable design like a microservices architecture enables high-demand services to scale independently. Additionally, adopting optimal data retention strategies can reduce storage expenses without sacrificing functionality. 

If your project has mandatory compliance requirements, address them early in the design phase. Incorporating compliance upfront prevents costly rework later in the development process and ensures you avoid penalties, making compliance a cost-saving strategy itself. 

Celebrate wise reuse 

You don’t have to invent a design system from scratch. Leverage existing frameworks like Material Design, Bootstrap, or Ant Design, which come with reusable components, established UI conventions (e.g., hamburger menus, search bars), and typography guidelines. Even if these don’t meet all your needs, they can serve as a foundation for customization, saving both time and money while maintaining quality. 

Focus on user-centered design 

Investing in user-centered design from the start pays off by reducing costly redesigns later. Use tools like Figma, Sketch, or Adobe XD to create low-fidelity wireframes and prototypes that help visualize software layouts and user flows.  

Wireframes are quick, basic representations (e.g., menu buttons, content blocks) that let you efficiently test ideas and gather feedback. Prototypes are more detailed and realistic, showcasing content and interactions as they appear in the final product.   

Both approaches are cost-efficient in trying fast and adjusting cheaply, making visible potential user flow hurdles, technical infeasibility, or ineffective designs.

Quick stats: According to PWC’s 2024 Cloud and AI Business Survey, top-performing companies — those embracing an AI-first strategy — use AI agents. The latter can help software developers turn ideas into requirements, requirements into user stories, user stories into test cases, test cases into code, and code into documentation. The result? Thirty percent efficiency gains, faster releases, and higher-quality software. 

Sixty-five percent of top performers have embedded AI into IT, including app development and management — compared to just 28 percent of other companies. 

Seventy-five percent of top performers have broadly adopted generative AI in software development, far ahead of the 51 percent adoption rate among other companies.

Go for iterative development 

Imagine completing a substantial portion of an app only to have your testing team uncover a critical bug. The cost of rework in such scenarios can be steep. That’s why Agile methodology has become a new norm in modern software development. 

By breaking the project into manageable sprints to handle them iteratively and involving cross-functional teams of designers, developers, and testers, the methodology helps deal with complex projects and opens cost optimization opportunities. Here’s how: 

• Identifying issues and problems early within each sprint is easy, preventing them from escalating to later stages where fixes become far more expensive and time-consuming. 

• The development team prioritizes delivering features with the highest value, which means faster time-to-market and higher ROI. 

• The approach encourages feedback loops from actual users or stakeholders after every iteration. So, it’s easy to identify misaligned and unnecessary features and factor in changed requirements with little sunk costs.  

Avoid overcomplication 

If a pre-built ML algorithm, public dataset, or third-party API exists, test it first — it may save you the time and cost of custom development or manual data collection. 

The same goes for reusable code libraries and components. For instance, Python’s math library eliminates the need to code mathematical functions from scratch, just as reusable components streamline app development (e.g., you can replicate a "buy now" button in an ecommerce app). 

Consider low- and no-code platforms 

Low- and no-code platforms help reduce software development costs and time, enabling teams to build and deploy functional prototypes or even fully operational systems with minimal coding effort. These platforms empower developers and non-developers alike to contribute, accelerating workflows and reducing overhead. 

Leverage AI code assistants 

AI code assistants — ChatGPT, Copilot, Cursor, Amazon Q, or Continue — turn tedious tasks into quick wins. They can generate boilerplate code in seconds, automate repetitive patterns and spot errors, offer context-aware improvements, and even refactor messy code. All this makes AI copilots your trusty sidekick, contributing to safeguarding code quality and reducing development time.

Quick stats: Forbes describes the domino effect that bugs can produce: Bug-fixing costs will only increase as the bug progresses through the SDLC. For example, fixing it in the planning stage can cost $100, but that same bug can become a $10,000 problem if it slips into production.   

So, what can you do to minimize the risk?

Shift testing left 

Under the iterative development model, testing starts alongside programming. The wise approach is shifting it even earlier, to the requirements-gathering stage. Involving QA specialists during the discovery ensures that all the requirements are testable and that no roadblocks will be found when you’re halfway through.   

Consider the difference between "the app should be fast" and "the app should load within three seconds for 95 percent of users." Precise, measurable requirements improve clarity and allow the QA team to start creating test cases right away, accelerating the entire development process.

Automate (to be used with caution) 

Test automation can optimize costs and streamline repetitive tasks in functional, regression, accessibility, and API testing. Automating form submissions or API validation, for example, speeds up execution and reduces human error. 

However, automation is only cost-effective at scale. Initial investments in script development, maintenance, and expertise must be carefully weighed against long-term savings. 

Optimize with AI 

AI-powered testing tools enhance coverage, detect flaky tests, and predict high-risk areas, allowing teams to focus on critical, high-impact test cases rather than running unnecessary suites.

Quick stats: According to Flexera's 2024 State of the Cloud Report, 59 percent of respondents prioritize cost optimization. Yet, public cloud spending still exceeded budgets by an average of 15 percent. Despite these challenges, optimism about the cloud remains strong, with 31 percent of the respondents expecting their cloud spending to increase over the next year. 

Public cloud waste was self-assessed at 27 percent, showing little change from the 28 percent reported the previous year.  

The PWC’s 2024 Cloud and AI Business Survey shows that companies that reported measurable value from cloud technology highlighted significant benefits: improved customer experience (40 percent), increased productivity (39 percent), cost savings and faster time to market (35 percent each), and new revenue streams (30 percent). 

The category of top performers reported improved profitability (74 percent), increased productivity (72 percent), faster time to market, improved customer experience (69 percent each), cost savings (65 percent), and new revenue streams (59 percent).   

Ready to optimize?

Automate for cost efficiency 

Automation of repetitive tasks helps optimize costs. CI/CD — continuous integration and deployment — is exactly about automation. From compiling builds after introducing code changes and catching bugs early to continuous releases with safe rollback mechanisms, CI/CD streamlines the entire process. 

In terms of cost savings, this translates into faster, higher-quality releases, reduced downtime, and minimized rollback expenses. Moreover, by configuring pipelines to handle only code modifications, CI/CD helps reduce cloud service costs, ensuring efficiency at every step. 

Embrace infrastructure as code 

Infrastructure as code (IaC) is another approach to automation: with scripts, you can create, configure, and manage servers, databases, networks, and other infrastructure components quickly with little involvement from your team. 

With IaC tools, you can be sure that no configuration mistake slips through. Parameters, like debug modes, database connections, and environment variables, are automatically set according to the script, ensuring consistency and leaving no room for oversights. 

Use the cloud efficiently 

Cloud-based infrastructure already saves costs over on-premises setups, eliminating upfront investments with a pay-as-you-go pricing model — but there’s always room for more optimization. 

• Choose the right cloud provider and pricing plan: AWS, Microsoft, and others offer discounted instances and free trials for cost-effective scaling. 

• Implement load balancing and automated scaling: These features adjust cloud resources in real time based on demand, ensuring you’re only using (and paying for) what you need. 

• Leverage cloud monitoring tools: Cloud providers offer built-in solutions to track resource utilization and pinpoint inefficiencies, helping eliminate unnecessary expenses.

Quick stats: The cost of software maintenance can reach up to 90 percent of software's lifecycle costs. 

Feeling the urgency to optimize here? We certainly do. 

Focus on preventive maintenance 

Spotting issues even before they happen is a good safety measure against costly issue resolutions that are prone to downtime and user dissatisfaction. Set up monitoring tools powered by artificial intelligence and predictive analytics and recognize alarming trends so that you never face an emergency. 

Streamline support processes 

Optimize your support workflows by automating repetitive tasks like issue routing to free up valuable resources. If you frequently encounter similar requests, deploying a chatbot can speed up response times and provide 24/7 support. Centralized logging is another smart move, allowing you to quickly trace issues to their root cause and minimize resolution times.  

Make your infrastructure self-healing 

Don’t waste time searching for on-call engineers to restart failed systems and servers. Minimize downtime with self-healing infrastructure that automatically reroutes workloads to healthy servers, restarts failed containers, or replaces faulty components, keeping operations seamless and uninterrupted.

Quick facts: According to CSV Now, a premium recruitment and headhunting agency, outsourcing delivers transformative benefits: 

• 59 percent of businesses report substantial cost reductions. 

• 65 percent of companies say outsourcing has helped them to focus on core business functions, boosting overall productivity. 

• 70 percent of organizations outsource to access specialized expertise, driving innovation and accelerating project timelines. 

• 60 percent of companies report that outsourcing allows them to quickly scale operations up or down in response to market demands. 

Outsource 

Outsourcing offers more than just cost-effective labor rates or flexible scaling. It reduces the risk of costly rework by providing access to experienced teams with proven success in handling similar projects.  

The market is flooded with low-cost outsourcing options, but choosing solely based on price often leads to costly quality compromises. Among clients who prioritized short-term savings over long-term value — only to urgently look for another vendor to remedy software quality — we were able to save $600K/year on average. 

Rely on open-source technologies 

Whenever feasible, opt for open-source tools, frameworks, and libraries to eliminate licensing fees. Feasibility means ensuring they align with compatibility, scalability, performance, and security requirements — if they check all the boxes, they can be a game-changer for cost efficiency.

• Clearly define the project scope and set priorities. 

• Check feasibility and estimate the ROI of features. 

• Identify risks, plan mitigation strategies, and allocate a contingency budget. 

• Document functional and non-functional requirements. 

• Validate core functionality before full-scale development.

• Enable reusability. 

• Implement UI/UX testing early.

• Adopt Agile and DevOps methodologies. 

• Automate repetitive tasks. 

• Reuse existing code components and avoid duplicating development efforts.

• Shift testing left. 

• Balance testing efforts and impact. 

• Enable test automation, if feasible. 

• Regularly review the test suite to remove outdated or redundant test cases.

• Automate deployments with CI/CD pipelines. 

• Use pay-as-you-go infrastructure. 

• Monitor and continuously optimize cloud resource consumption.

• Automate routine maintenance tasks. 

• Monitor infrastructure and application performance.

• Audit project costs and compare them against the planned budget. 

• Use open-source tools wherever possible. 

• Conduct regular reviews with stakeholders.

Cost and budget tracking metrics help ensure visibility, keeping stakeholders in the loop and exposing hidden inefficiencies. They’re the ultimate tool for turning insights into action and waste into savings.

The right tools help control costs and optimize resource allocation. Here’s a breakdown of key categories and their impact: 

• Monitoring tools: Monitor resource performance and usage in real time to detect inefficiencies and prevent overspending. 
  Examples: Nagios, Splunk, Sensu, ELK Stack, New Relic, AWS CloudWatch, Azure Monitor 

• Cost management tools: Analyze spending, set budgets, and track costs. 
  Examples: AWS Budgets, AWS Cost Explorer, Azure Cost Management. 

• Infrastructure automation tools: Automate infrastructure provisioning, configuration, and management. 
  Examples: GitHub Actions, Jenkins, Terraform, Ansible, AWS CloudFormation, Azure Resource Manager 

• Collaboration and communication tools: Streamline communication, documentation, and project management to reduce inefficiencies, improve visibility, and enhance productivity. 
  Examples: Microsoft Teams, Slack, Trello, Asana, Confluence. 

• Testing automation tools: Reduce manual effort and identify defects earlier, saving on rework costs. 
  Examples: Selenium, JMeter, Cypress, Locust 

• AI-driven optimization tools: Use stand-alone AI software and AI-powered plugins to accelerate the brainstorming and development process.