7 tips to prevent cost overruns in software development projects

Project management is a tough craft to master. Some projects are over budget, some are over time, and some are over scope. Even though factors affecting budgets, timeframes, and deliverables vary from project to project, if you know what can potentially lead to cost overruns, you’re in a better position to prevent them. Thereby, here are our tips to prevent cost overruns and eventually finish the project successfully.

1. Don’t ignore the discovery phase

A discovery phase allows stakeholders to gain a better understanding of the project, its goals, limitations, and target audience. The importance of immersing the team in the customer's business cannot be overstated. The client needs to be closely involved at this point in the process as well.?

The discovery phase takes place in Innowise Group as follows: right after taking the case, we start asking questions and discussing issues, then we make suggestions, and, finally, form a complete picture of the project, which may differ from what the customer originally presented.

2. Perform thorough planning

The more accurate estimates you have before the project starts, the lower odds of exceeding the pre-set budget. Therefore, provide a detailed plan that describes such stages as projects’ ideation, development, documentation, deployment, launch, and, eventually,? maintenance. Finally, provide a comprehensive roadmap that specifies all crucial milestones and describes how financial resources will be allocated. This becomes especially important while planning sprints when a complex project is split into smaller tasks with intermediate results.

3. Elicit requirements

There should not be any gap for ambiguity when it comes to the tech requirements for complex solutions. Without transparent, comprehensive documentation, the risk of misconceptions increases dramatically. For instance, if the tech requirements are unclear, the software might not serve the defined goal, the business value will be less than expected, or the launched solution will not match the target audience. It is worth mentioning that risk is an inevitable part of the project’s estimation. Thus, assumptions should also be considered as part of risk management since some threats are complicated to identify and explore.

4. Decide on the technology stack

Having the ability to customize your software and the ability to swap out different components of the stack is imperative if you want your technology choices to continue benefiting you in the future without drastic overhauls.

The difficulty of switching to a new technology stack is one of the main reasons for avoiding an outdated technology stack. A situation like this can even result in complete locking into one system, making migration difficult, if not impossible.

Future-ready technologies not only diminish the chances of having to switch in the future but also make it much easier to do so.

5. Monitor progress

If PMs track the project’s progress thoroughly and distribute tasks and responsibilities among the team members according to their skills and competence, issues can be nipped in the bud. For example, real-time dashboards are ideal for evaluating the workload and timelines, allowing Team Leads to bypass missed deadlines and project slippage. Moreover, permanent project reviews are crucial since they allow for timely corrections and alterations in the scope of work if changes occur.

6. Establish proper communication

Delays are inevitable if there is no clear communication between the project team and stakeholders. Permanent feedback between team participants and the customer leads to cost optimization, increased productivity, saved time, and minimized errors. No wonder it is common practice in software development that people and their interactions are the driving force behind successful teamwork.

7. Choose a reliable vendor

Before assigning an outsourcing partner to the project, conduct rigorous background checking. Gather information from open sources about the reputation and experience of a potential vendor since it is not a big deal in the world of free access to most of the data. Additionally, ensure that the service provider has substantial expertise in similar domains and industries and find trustworthy reviews on platforms such as Clutch or GoodFirms.

Bottom line

Budget violation is the hazard every stakeholder strives to prevent by any means. Increased project costs can become a nightmare threatening the project's feasibility and resulting in tearful financial consequences. Fortunately, the above-mentioned tips in the article can considerably streamline the software development process and, appropriately, eliminate the risk of over budget.

We at Innowise Group know how to deliver driving-forward solutions of flawless quality which bring real value to our customer's businesses. We estimate the customers' requests and needs and suggest the most relevant pricing model that meets all the tech and financial requirements. With our top-notch assistance, your project will be under the careful supervision of seasoned specialists who are always ready to go the extra mile to ensure your software is robust and meets all quality standards.