After years of effort Your software is now in operation.
However, when you go through your budget you realize you’re seeing that the expenses for your month aren’t decreasing. If there’s anything to be said, they’re rising. What’s the issue?
Hidden costs associated with software that you should prepare for when you start your project.
It’s something I have to remind my clients every time they’re working on new software. They believe that after the software is finished, their costs will be reduced to a minimum and they’re done with paying.
It’s not true whatsoever and it could not be further from the truth.
Here’s an analogy that explains the scenario. Imagine you decide to move your apartment from living in a rental to purchasing the house you’ve always wanted. Do you think that, after the deposit, your mortgage is your sole cost as homeowner? No.
Take a look at your expenses. The cost of your water, gas invoice, electric bills and other expenses will increase because your home is bigger than the apartment. Other costs could come up previously unimagined for example, landscaping services or a gardener to keep your property in good condition.
Software development is the same thing.
If you decide to expand from a smaller project to a larger one There are certain costs that you’ll have to pay on a regular basis. We are all so busy in determining the development cost and forgetting about the hidden post-launch development expenses.
In this article I’ll discuss the five biggest hidden costs of software that you need to be aware of when you have launched.
Hidden Cost #1: Maintaining Your Staff
Who developed your software? The team that developed the app will continue to update your program even after launch.
Your software will change with the marketplace as new opportunities arise. The vision will also change in response to customer demands.
Always keep in mind one thing: stagnant technological advancement is dead technology.
Consider companies like Facebook, Google, Twitter and the other big companies on the market. They’ve done a decent job in making software, wouldn’t think so? Anything you can think of has been designed. What is the reason they have an engineers working behind them? Software development is never done.
Between maintenance or new features, client demands, and even expanding this platform. You’ll require staff to keep up with this.
In general, take a look at how frequently applications for mobile devices are upgraded and updated.
Around 30 percent of apps are updated at least once a month. A further 53 percent app updates are made each six months.
This means you should not let your developers depart after the launch date. The developers who created the app will be on the board.
The fact is that If you eliminate users, your application will gradually end up dying.
To maintain an edge in a highly competitive marketplace it is essential to constantly improve. The software you used to start must change and evolve as time passes.
There may be some in the capacity of the staff you have to keep. For instance, you might have employed five engineers during the development phase. Now, you only require one or two. The team you have will remain comprised of engineers, QA expert, DevOps, a designer and project manager.
These costs for post-launch development must be considered and anticipated prior to launch.
Hidden Cost #2: Hosting Expenses
It is important to include hosting expenses in your initial budget.
The costs come from hosting servers for your application. You’ll need email servers as well as push notification servers. integration servers, analytics servers, and more according to the kind of app that you’re working on.
It’s likely that you’re dealing with a business which offers a product or SaaS service you’ll have to pay a monthly charge for. The software is hosted on the cloud using the help of a company such as Amazon Web Services. There is an annual fee for this kind of hosting, too.
You will not only have to pay these costs after launch and beyond, but they will grow as your business grows.
It’s crucial to plan for this from a financial perspective. There will be ongoing hosting expenses to ensure that the hosts are maintained. In the event that your servers reside on clouds, it is likely that you will require staff members who will deal with the servers. This is a return to the first part regarding having to pay your employees.
Hidden Cost #3: Maintenance
Before you launch, I’m sure that you’ve checked the process to ensure that everything worked in a proper manner. The bugs were all found and fixed. You’re finished, right?
This isn’t necessarily the case particularly when it comes to mobile apps.
Although you may have addressed the bugs on specific devices or operating systems, the devices change with time. As a result your application or technology may be regressing.
Look at the cost of maintaining an app within the first year after the app’s launch.
You may are aware of the reasons why software development is costly. Why is it so expensive to maintain? What are the companies that spend between $10k and $25kplus per year?
When new requirements come from Apple or Google Your level of compliance could fall.
A new law is in place to improve the quality of your app and it’s safety of the app as well as the security for your apps. These things can be changed.
I’m talking about things like:
- Compliance with GDPR in Europe
- CCPA conformity in California
- ADA conformity across the US
The list continues on. Technology must evolve in the same way that all these things alter.
Refactoring is a different aspect of maintenance that’s worthy of noting by itself.
Refactoring is the idea creating code adequate to pass the basic tests, compliance, restrictions, or some other. You then go back and make it cleaner at a later date. Here’s a brief graphic explanation of the process of refactoring.
The code you was written during development could be “good enough” at the time. However, as your business grows the business, the code must be revised to handle the increased volume of traffic as your business expands.
In all honesty this is a good problem to be faced with. It indicates that your app is expanding. However, it is important to be aware of the costs prior to time so that you are completely prepared.
Here’s a different analogy. Let’s suppose you own a printing press for commercial use. The main printer you have is printing 5,000 flyers every day. It begins to fail and you have to fix it using an “band-aid” remedy. You know that your solution will bring the machine up and running to produce 5,000 flyers a day. If you want to increase this to 10,000 flyers, the bandage will not be enough.
This is a fantastic issue to be faced with. If you reach this number, your day-to-day business is now doubled. However, this comes with extra cost of maintenance that you must to prepare for.
Hidden Cost #4: Training
Training is often the least understood expense when it comes to software costs.
The most common mistake people make is to assume that the personnel who manage the application will remain with them for the rest of their lives. It’s unlikely to happen.
In real life, some members of your staff members will make career-related decisions and depart from your company. They’ll be dissatisfied with the others on your team and will dismiss them. This is the normal thing to do in managing the business.
The inevitable a turnover in the field of personnel.
What happens when you lose someone who has important domain expertise? Don’t think that the person you choose to hire can replace that person right away.
If one is a competent engineer or developer however, doesn’t mean they are knowledgeable about the software you’ve developed. They’re an engineer of the program they’ve created, but not necessarily the one you’ve created.
Therefore, it is time-consuming for your users to comprehend your business plan as well as technical detail, the infrastructure, and other elements in your program.
The typical cost to find, hire and teach the new employee is $4,000.
In the technology industry it is possible for the costs to be more expensive.
I’m sure that some of you may believe that engineers are a dime a dozen and you’ll find them everywhere. However, even if someone is a blackbelt as well as skilled, they are not going to become a productive member of your team the moment they join. It requires time.
So how do you get rid of the cost of these costly training expenses? The purpose is to stay clear of one-off failures when dealing with humans.
You don’t need one server running your whole mobile app, would you? If the server fails then the app goes down and with it. Similar logic could be done to individuals.
If you have one person who has vast domain knowledge, what happens is the outcome if they are hit by a vehicle? Do you and your company really survive without them?
It is essential to cross-train your employees. Be sure that your capacity doesn’t exceed an unattainable level.
Always have at minimum one person spare. If you’re looking to hire two persons at most and you’re not sure, you’ll need to employ a third. In the event that one of them leaves there’s still enough personnel to function. In the event of a loss you’re able to hire another person to be the “spare tire.”
Let’s suppose you own a retail shop. It only requires two people working at the counter during a shift, two early in the morning, and then two later in afternoon. Would you hire just four employees? No. If someone quits, is fired, is on vacation, or is sick, you’ll be left with a shortage of staff.
Even if you just require two employees to run the shop during a period, having 3 well-trained employees is a more secure alternative.
This analogy is amplified in the world of software development in the event that the person who is leaving brings all the knowledge they’ve acquired with the knowledge they have acquired. Learning for a new individual is almost impossible when there is no details to share.
Hidden Cost #5 Strategic Costs
Strategic costs can be incurred when your company is aware of an emerging market opportunity. It is essential to change the gears swiftly to ensure that you’re able to address the market demand.
A lot of the time markets are highly influenced by time. If you wait for six months before taking action you could have been too late. Technology-wise only 34 percent of businesses want to have a the advantage of being first to market.
If you’re in that category, it will give your program a major advantage over your competitors. Strategic costs can creep up on your software and force you to change to a different set of goals.
It is possible that you will need to employ a few additional individuals to ensure you meet your goal within the timeframe. This is why the awareness of hidden costs is vital.
Sometimes, you have to code certain elements to make it to the timeline. This is basically “hacking the way” to an idea that must be put on the market in the shortest time possible.
After the software goes out there, you’ve accrued what we call “technical debt.” It is important to revisit the software to ensure that it is scalable to meet the ever-growing demands of your business. All of this falls under that category called strategic expenses.
You understood when you entered into this project that you were basically creating an advanced house of cards in order to bring it to market. But this house of cards isn’t safe for long. It could easily fall apart.
You must now be able to really rebuild or refactor like we did in the past when we discussed the cost of maintaining software.
The reason that strategic costs are important to be aware of is that it allows you to leverage. If you are prepared, you will be able to capitalise on this chance as soon as it arises. It isn’t a good idea to let money become a factor there.
Best Practices and Pro Tips to prepare for hidden software Costs
After you’ve read about the five most expensive cost-saving software costs after launch It’s time to provide some suggestions to aid you in planning to plan for those costs.
The cost of launching a business is inevitable but you don’t have to blow your budget. These suggestions will help you save money , if you prepare according to the plan.
Build Your Team
We’ve already discussed the fact the necessity of maintaining your employees. To reduce costs it is essential to create these with the golden ratio which I’ve covered in the past in videos and posts.
Here’s the concept. Utilize both remote and local resources in a way that your business is in the right equilibrium for your business. This kind of employee development allows you to expand your business effectively without breaking the bank.
Servers are different from. Maintenance
We’ve also covered the hosting cost and maintenance costs in separate articles. However, these two nebulous costs are actually connected.
Sometimes, it is more sensible to pay more hosting costs, as you don’t have to manage the same level of service on your own.
Let’s take an example. that you pay $1,000 for an all-inclusive host. It’s not much when compared with the expense of having an employee run a cloud hosting system by themselves.
You can take the money without second thoughts. It’s less expensive, and it becomes a hassle for another person to handle, not you. It’s not necessary to have an employee who constantly must deal with maintenance of servers. Therefore, try to find a host who can take care of these matters.
Although the initial cost may seem expensive, it is important to evaluate the costs of having someone from your team working on it. Hosting costs is always less in the end than running it yourself.
It is essential to have an expert partner who is familiar with the technology you use.
It may be your hosting company, or an outsourcing agency that you’re working or a platform you’re integrating. Whichever one you choose, ensure that they are aware of your goals. It is crucial that they can assist in the grand scheme of things during changes in the world.
The cost of chance and the consequences of making errors are extremely costly.
Strategic partners could save you time, especially by being an expert in a certain subject. Maybe they’ve done this before and committed mistakes that you could learn from.
A strategic friend is useful and could help you save a lot of money in the long run.
Anticipate Today, Solve Tomorrow
It’s clear that you have to be prepared for future challenges and opportunities. We’ve discussed this throughout this entire article.
Be prepared for these issues today But solve them in the future.
Many of the issues we face today don’t need to be solved immediately. There’s a possibility that you’re developing something now that’s strong enough to make it to market without having to hire three or four new developers. That’s fine. But it’s important to be aware of the costs you’ll incur if you delay them. likely to have to pay later.
This is particularly important especially for companies that are new. Today’s dollar is far more valuable than a $1 tomorrow.
Be mindful of the amount of debt you take on to ensure you’re in advantageous position to deal with the issues when they do arise.
Let’s say, for instance, that you are aware that your server is likely to fail once you have passed 100k users. It doesn’t mean you must be paying for the capacity in the beginning even if you don’t have any users. The money can be better utilized elsewhere.
When you hit 100k users, it’s an ideal situation to be in. You probably run a profitable business that can afford to cover the additional expenses.
But, if you’re paying for the infrastructure right now it’s burning through dollars today on a possible issue that could not arise in the next year or two years.
The expenses associated with the development of software do not stop once you’ve launched. If you’re developing an application, it’s important to be aware of these five costs I’ve listed in this article:
- 1. Maintaining your employees
Planning ahead for these will ensure that you have the funds in your budget to succeed. In the event that you don’t it is likely that the performance of your program will be diminished. Follow my expert guidelines and best practices in your mind and also to help you save money on development of software.
I hope this article was useful. Utilize it to predict future costs when you’re working on new technologies.