How to Guarantee a Return on Investment in Custom Software Development: Strategies and Tools for Entrepreneurs

Today's business world is becoming increasingly digital, and many companies decide to invest in the development of websites and mobile applications. But how can you guarantee a return on these investments? In this article, we will explore sequential steps, tools, and methods that will help you make confident decisions about investing in development.

1. Defining Business Requirements and Understanding the Target Audience

Before starting development, it is important to understand what you need and what goals you want to achieve. This requires a clear definition of business requirements and an understanding of the needs of your target audience.

Questions to ask at this stage:

What are the key business requirements for the new product?

How will the new product help improve the current business process?

What are the needs of our target audience that the new product can meet?

Tools and methods:

• SWOT analysis: This tool helps to identify the strengths and weaknesses of your business, as well as opportunities and threats. For example, if you have a strong marketing team but outdated sales technology, implementing a new product may be a great opportunity to improve this process.
• Buyer Persona analysis: This research method helps you understand and define the needs and preferences of your target audience. For example, if your target audience is young people, you need to ensure that the new product is convenient for mobile use.

2. Forecasting ROI

After defining business requirements and understanding the needs of your target audience, the next important step is forecasting the expected return on investment (ROI). This is necessary so that you can ensure that investment in development will yield positive results and will be justified.

Questions to ask at this stage:

What increase in sales do we expect from the new product?

What growth in the customer base or increase in productivity do we expect?

Tools and methods:

• Sales forecasting: Use historical sales data and industry trends to make educated assumptions about how the new product might impact sales. For example, if there is a trend in your industry towards increased online sales, you can assess how a new website or app might affect this trend and increase your market share.
• ROI modeling: Use data analysis tools such as Google Analytics or Tableau to analyze your current business metrics and create a model of expected ROI. For example, you can use data on the conversion of your current marketing channels to forecast how the new product can boost these metrics and how this will reflect on your ROI.

3. Budgeting and Planning

Once you have a clear understanding of what you want to achieve and the expected ROI, the next step is to budget and plan for the development. This involves resource allocation and defining timeframes.

Questions to ask at this stage:

How much money are we willing to invest in development?

What are our timelines for developing and launching the product?

Tools and methods:

• Scrum or Agile methodology: These project management methodologies allow for flexible management of the development process, making it transparent and allowing for on-the-fly changes. For example, you may decide to pause work on one feature and switch to another if you find it offers greater value to your business.
• Budget and resource planning: Use planning tools like Microsoft Project or Jira to create a detailed development plan, allocate resources, and manage the budget. For example, you can assign a certain number of man-hours to develop each feature and track whether deadlines and budget are being adhered to.

4. Monitoring and Adaptation

Once development has started, it's crucial to continue monitoring the process and adapt to changes. This will help you timely address potential issues and provides flexibility to adjust course if needed.

Questions to ask at this stage:

How is the development process progressing and how is it aligning with our plans and budget?

What feedback do we have and what lessons can we learn from it?

Tools and methods:

• Project Status Reports and Scrum Meetings: They allow you to track the progress of development, identify issues, and make decisions about further actions. For example, if during the project you find that the development of one of the features is taking longer than planned, you may decide to change priorities or redistribute resources.
• Data Analysis: After the product launch, use analytic tools such as Google Analytics or Mixpanel to track product usage, conversions, and other key metrics. This will allow you to see if you're achieving your goals and, if necessary, adjust your strategy.

5. Post-launch Analysis and Optimization

After launching a new product or service, it's essential to conduct a detailed analysis of its performance and optimize it based on the gathered data.

Questions to ask at this stage:

What performance metrics have we achieved compared to the forecasted ones?

Which areas require improvement or optimization?

Tools and methods:

• A/B testing: This is a method in which two versions of a product are presented to an audience to determine which one is more effective. For example, you can conduct A/B testing of two design versions of your online store's page to find out which one leads to a higher number of purchases.
• Google Analytics, Firebase, and other analytic tools: They provide you with data on how users interact with your product, allowing you to identify weaknesses and areas for improvement. For example, if the data shows that users are leaving your site on a specific page, it may indicate a problem that needs to be addressed.

Remember, development is an iterative process that requires constant monitoring, analysis, and optimization. With this approach, you can confidently invest in development and ensure that your investments pay off.

By the way, you can order development using the Scrum methodology on the website https://sailet.pro.

Additional Tools:

Work Breakdown Structure (WBS)

• Description: Hierarchical decomposition of the project work into manageable small objectives for better control and understanding.
• Tools: Microsoft Project, Smartsheet.

PERT Method

• Description: A statistical tool for project risk analysis and management, determining the probability of completing the project within the set timeframe.
• Tools: ProjectLibre, @RISK.

Change Request Management (CRM)

• Description: A formal process for proposing, evaluating, and approving changes in a project.
• Tools: ServiceNow, TopTeam Analyst.

RACI Matrix

• Description: A tool for defining roles and responsibilities of project participants, ensuring clear delegation of duties.
• Tools: Toggl Plan, TeamGantt.

Weekly Status Reports and Regular Meetings

• Description: Consistent communication with the client to ensure project transparency and timely identification of needs.
• Tools: Basecamp, Asana, Skype, Zoom.