Why is your company’s software failing? Poor budgeting could be the culprit


Proprietary software is often seen as the holy grail for businesses, a sure sign that they have “succeeded”. Ushering in digital transformation establishes a business as technologically advanced and innovative, while simultaneously increasing overall business value.

However, when creating a software development budget, many start-up companies tend to be overly conservative, leading them to spend more money in the long run. A tight initial budget does not take into account the project changes that will inevitably arise during the development stages.

Revisions to software and application development can lead to higher long-term costs when the necessary capital is not available upfront. According to a 2020 report from the Consortium for Information and Software Qualityunsuccessful software projects cost businesses $260 billion and software systems with operational failures cost $1.56 trillion.

Building more budget into the front-end of software development can help you anticipate failures and properly allocate resources to ensure software success. I reached out to Mohan kumar Sattineedi, a digital analyst for Propel Technology, who has expertise in helping companies navigate software procurement and project management processes, including coming up with innovative ideas to address budget issues .

When creating the budget for proprietary software, here are three things Sattineedi recommends companies consider:

1. Set expectations for what your software will accomplish.

What does the team want the software to actually do? Are there any specific problems that the software will solve? How will he do it? Are there already in-house experts or do you need to hire a person or a team to help develop the software? Defining the goals of the software and having a thorough understanding of what it will do is an essential first step in setting your budget.

Budgeting for a software solution should be preceded by budgeting for a hypothesis or proof of concept,” Sattineedi said. “Having a deeper understanding of the requirement by identifying and onboarding the right people with subject matter expertise and industry experience is key to having budgeting acumen once the hypothesis is proven.”

2. Consider the end user experience.

Who is the intended user of your software and how will they use it? A key part of software development comes from actual user testing and feedback implementation, where testing is repeated until the software is fully hooked up. Testing and incorporating changes into the software requires capital. If enough money is not set aside in advance, a company can – and will eventually – lose funds due to the need to re-create their product or a lack of product sales and revenue.

“A limited budget will have a direct influence on time and quality – the triangular factor that remains relevant until this date,” Sattineedi said. “When it comes to budgeting, the optimistic part of the human mind tends to associate itself with only the best situations. With so much to accomplish on a shoestring budget, shortfalls and inconsistencies in requirements are often discovered more late in the development life cycle.

Sattineedi went on to say, “Failure to build for scalability and test the solution is particularly damaging because the potential delay occurs at the end of the development lifecycle, making recovery impossible. A limited budget forces many deliverables to be compressed into a short period of time, which reduces the possibility of building an application based on real user feedback.

3. Create a realistic timeline.

“When is this software needed?” » is always the big question. But between now and the deadline, a myriad of risks and issues can arise, and they need to be budgeted for. You need to broaden the scope of the work to include the “what ifs”. What could happen? What are the team’s expectations? What kind of hiring and training is needed? Roughly 20% of software development is devoted to problem solving this could probably have been avoided if a larger budget had been created.

Tight software budgets cause headaches for everyone involved as they directly influence product time and quality. Budgeting with an optimistic mindset, as opposed to a realistic mindset, allows only the best scenarios to unfold in development. The production lifetime in software is a lot of work. Trying to accomplish everything on a shoestring leaves room for an incomplete and inconsistent product, factors that are often uncovered later in the development lifecycle.

Failure to consider scalability and test the solution is particularly detrimental because the potential delay occurs at the end of the development cycle, making recovery impossible. A limited budget forces many deliverables to be compressed into a short period of time, which reduces the possibility of building an application based on real user feedback.

As an example, Sattineedi explained that a tight budget led a company to build an app for users on a single platform. Later, the company discovered that the app should have been designed as a cross-platform solution (across iOS, Android, and the web). The software had to be redesigned for the expansion of cross-platform users, a consequence of starting the project with an overly conservative budget. This ultimately cost the company more money as it delayed the time to market for all platform users and affected users who had previously used the app.

New businesses that think integrating proprietary software into their business is a sign that they’ve been ‘successful’ forget a few things about software development: to truly ‘succeed’, you need to understand what your software solution aims to achieve. accomplish, onboard the right team to achieve your goals, and create a budget that allows for trial and error to resolve issues as they arise. Ultimately, creating a bigger budget for development will prove that your business has really arrived.


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