Here are four ways to achieve major savings in software product development costs that have secondary benefits as well. While accomplishing visible cost savings, software development companies can realize significant improvement in product quality, customer satisfaction, compliance and overall product lifecycle management.
1. Deliver higher quality software – Outsource Product Testing to Experts
Frequently changing requirements together with shorter product development life cycles increase pressure for product test teams. The National Institute of Standards reports that US companies spend up to $60 billion annually fixing software problems detected after software is released – even when billions of dollars could have been saved by more effective testing. Quality rating per hour can be significantly improved when quality assurance and testing are outsourced to experts.
Another cost of inadequate product testing is the loss of repeat business that’s almost inevitable when poor quality software is delivered. Outsourcing product testing to a company that specializes in QA and testing can give a software company a competitive edge.
Product testing is a specialized skill best performed by experts rather members of a software development team. Outsourcing to test experts is a cost effective way to ensure better quality products, happier clients and a better reputation.
Treating outsourcing as a mechanical process of moving product testing to another location isn’t enough to incur a benefit. A strategic plan including well defined goals is required to reap the greatest value from the process.
Challenges of product testing in outsourced environments include
• methodology integration
• communications management
• technology and skills
• vendor infrastructure problems
2. Develop software at a lower cost – Outsource offshore
A highly flexible workforce with a large range of multi technologies can be outsourced offshore. A good match requires companies with the knowhow and experience required for an excellent product. Consider candidates with the geographic and cultural flexibility needed to work onsite at a later date.
As an ISV, you’ll be concerned with product development and work on a customer project. You need to evaluate the costs of development time, QA, overhead and other unknown costs. Risk and value should be shared by both the ISV and the outsourcing partner. Close supervision and well defined business processes and goals tend to be more effective.
3. Improve project management – Automate licensing and entitlement
Despite the enormous growth and development of the software industry, ISVs have often failed to use automation software effectively. Automating software licensing and entitlement management systems can often help in cost reduction.
Software Asset Management facilitates optimizing and managing the purchase, maintenance, utilization, and disposal of software applications within an organization. License expiration can be tracked by companies to ensure they’re compliant with regulations. This can help eliminate legal costs associated with license agreement violations and also become a valuable part of a company’s reputation management strategy. These important risk management strategies are critical to achieving a software company’s long-term business goals.
4. Reduce losing revenue from virtualization – Monetize customer usage
According to one survey, vendors are underestimating their risk of lost revenue associated with virtualization. Virtualization risks result from the ease with which instances of an application can be recreated for use in a virtualized environment — such as a public, private or hybrid cloud — without receiving payment for that use. Today most vendors now have policies and rules in their licensing agreements addressing virtualization. Adoption of a compliance policy that uses licensing technology in order to enforce company regulations and agreements empowers the capture of revenues from virtualized use.
ISVs can monetize customer usage. With only a small number of ISVs adopting this technology, many are failing to profit from potential revenue gains. New software licensing, installation, and compliance enforcement solutions can ensure licensing requirements are met and software investments optimized.