Finding the Balance When Reducing Software Development Costs

In the current global economic climate and with another recession looming, leaders are under pressure to reduce costs while dealing with increased technical complexity, and a scarcity of skills.
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When IT leaders want to reduce their spending, they usually review their current arrangements with outsourced partners and consider alternative offerings based on lower fees. In some regions, due to local labour costs, businesses often seek offshore partners that offer more attractive hourly rates.
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However, when choosing an offshore partner for software development, maintenance and ongoing support, careful attention must be given to the actual value delivered on a continuous basis. According to Forbes, it’s essential to understand the Total Cost of Engagement (TCE).
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While the lowest price can be tempting in the short term, hidden risks that can negatively impact business and cost much more in the long run, cost-effective quality software delivery is the goal, and it is crucial that IT leaders consider more than the rate card when looking for ways to reduce costs.
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Learn more about what software development typically costs.

‍When calculating TCE, it becomes clear that there is a world of difference between upfront lower prices and long-term cost-effectiveness. Heavily discounted offshore offerings typically present 3 key risks:

• Low skills/low quality
• Increased technical debt
• Cultural/communications issues

Should Offshoring Be Dismissed?

No, offshoring should remain part of an IT leader’s toolbox, but these risks must be factored into the equation when deciding on the best offshore partner for your business. With many years of experience working with onshore, offshore, and nearshore teams, JustSolve has learned how to mitigate these risks to help our customers achieve the best possible outcomes while optimising their TCE.
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Finding the sweet spot between quality and cost is a continuous challenge when it comes to tech talent. Many offshore vendors keep their prices down by employing entry-level developers with limited skills and experience. Higher-skilled talent know their value and will move on if they are offered inadequate salaries and working conditions.  
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Most of these vendors are generalists in many different software platforms, meaning companies get the same basic skill set regardless of the nature and complexity of their tasks, ecosystems and tech stack. Entry-level developers take much longer to complete tasks, and re-work, decreasing productivity rates and increasing the TCE.  Due to high staff turnover in vendors with poor employee value propositions (EVP), any investment in training is unlikely to add lasting value to the business. All of this can lead to quality concerns, such as bugs, longer delivery times, technical debt, performance issues, security issues and poor user experience (UX), which have costly financial and reputational implications.
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Projects delivered by lower-skilled developers typically require much more stringent quality assurance measures to monitor service levels closely and ensure everything is on track. If the worst happens and the project goes seriously wrong, the lower price can be infinitely expensive if the business gains nothing tangible in return.
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IT leaders must be wary of the allure of offshore vendors offering bargain basement costs. If it sounds too good to be true, it probably is.
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Although these hidden costs are hard to measure, they can be much higher than the false economy offered by an attractive hourly rate. ‍

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“The bitterness of poor quality remains long after the sweetness of low price is forgotten.” 
- Benjamin Franklin

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‍JustSolve Mitigates the Risks Associated with Low-Cost Software Development.

At JustSolve, our commitment to delivering continuous value to our customers without sacrificing quality ensures that they consider the combination of a team very carefully, balancing highly skilled team members with lower skilled members, avoiding technical debt and ensuring highly cohesive and productive teams. Focusing on quality software development leads to faster time-to-market, better customer and user experience, higher productivity and capitalising on revenue-generating opportunities, all of which lower the Total Cost of Engagement (TCE).

‍These are some of the reasons why JustSolve is considered a leading software development company in South Africa. We offer multiple engagement options to our clients, ensuring the best fit per use case. Our Dynamic Scrum Team as a Service model ensures high-quality outcomes while ensuring a 20% savings compared to other outsourcing models.

‍Free Consultation.

‍JustSolve empowers businesses through digital innovation and offers the following products, which include:

‍Hyperautomation

• Innovation and Design
• Product Development
• Data Analytics and AI
• Automation (OutSystems, Mendix, DataRobot, Microsoft)‍

Talent Solutions

• Talent Management
• Staff Augmentation
• Training
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JustSolve will assist your business in developing cost effective, quality software, all while empowering our clients to do more with less.
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‍Book a risk-free consultation now.