System development is a complex and dynamic process that involves various activities, resources, and stakeholders. It can also be expensive, especially if you don't plan, monitor, and control the costs effectively. In this article, you will learn some practical tips on how to control system development costs without compromising quality and performance.
One of the main sources of cost overruns in system development is scope creep, which means adding or changing features or functions that were not originally agreed upon. To avoid this, you need to define the scope and requirements of the system clearly and precisely, and communicate them to all the parties involved. You also need to establish a change management process that defines how to handle any requests for changes, and how to assess their impact on the cost, schedule, and quality of the system.
When taking on a new project, I first want to understand what the business value is so that I have a sense of what is worth investing into it. It makes very little sense to invest more than the project can bring to the company. The next thing I look at is how to break down the problem into what is already solved by existing technology versus what is unique value add that my team and I need to build. It is important to focus the team on unique value and either buy the rest or use open source software when possible. Following milestones and getting a customer for the project are also good guardrails for software products.
In my opinion, this is the most important part of the development process. I have seen more projects fail from poor discovery than any other reason. Even with the benefits of agile development, poor system requirements result in increased development time, costs and rework. Mock-ups and wire frames can truly help the customer see what the finished product will be. I have been on projects where every single requirement was documented and double checked with the client company, and when The finished product was nearing testing, the client realized it is not they envisioned. This is because no mock-up was shown to the client only text-based requirements. A development company has to make sure that they talk with the actual end users.
Another factor that affects the cost of system development is the methodology and tools that you use. Different methodologies have different advantages and disadvantages in terms of cost, speed, flexibility, and quality. For example, agile methods are more adaptive and responsive to changing requirements, but they may also require more collaboration and testing. On the other hand, waterfall methods are more structured and predictable, but they may also be more rigid and prone to errors. You need to choose the methodology and tools that suit your project's characteristics, goals, and constraints, and that can help you optimize the cost and value of the system.
The resources that you use for system development include people, time, materials, equipment, and software. You need to manage these resources efficiently to control the cost of the system. This means that you need to estimate the resources needed for each activity, assign them to the right tasks and roles, monitor their utilization and performance, and adjust them as needed. You also need to avoid wasting resources on unnecessary or low-priority activities, and leverage existing resources as much as possible.
The quality and testing of the system are crucial for ensuring its functionality, reliability, usability, and security. However, they can also be costly if they are not planned and executed properly. To control the quality and testing costs, you need to define the quality standards and criteria for the system, and apply them throughout the development process. You also need to design and implement effective testing strategies and techniques, such as unit testing, integration testing, system testing, and user acceptance testing. You need to avoid over-testing or under-testing the system, and fix any defects or issues as soon as possible.
Finally, you need to monitor and review the costs of the system development regularly, and compare them with the budget and the expected benefits. You need to use appropriate cost measurement and reporting tools, such as cost variance analysis, earned value analysis, and cost-benefit analysis. You need to identify and analyze any deviations or discrepancies in the costs, and take corrective actions if necessary. You also need to review the costs with the stakeholders and sponsors, and communicate any changes or risks that may affect the cost of the system.