The cost of software development, upgrade and maintenance projects can be a sore point because they don’t come cheap. Whether you take-on the projects in-house or outsource them, there are technology and resourcing costs that can spiral when unmanaged, causing them to go over-budget.

As with any project, a quick return on investment is wanted from software projects. When your business is reliant on technology to run and be profitable, extended tech projects that don’t perform or deliver value fast are a thorn in the side of business continuity as well as the bottom line.

Here’s an idea of software project costs

In Dubai, the cost of the average app development project ranges from $5 000 to $10 000. For complications and multi-feature app, prices shoot to between $267 000 and $360 000. 

Need a website? For a small and simple business website, expect to pay in the region of $15 000.  For a conversion or lead-focused website, the cost will be about $30 000, and $50 000 upwards for a complex, feature-rich website. 

The average cost of a business software upgrade, from Enterprise Resource Planning and Customer Relationship Management systems to IT security, can range from a few thousand to hundreds of thousands of dollars, depending on the size and the type of business you are in.

Don’t underestimate the time and financial resources needed to build quality, functional software applications. There is a lot that goes into it and costs begin to stack-up when the project doesn’t perform or goes over-budget. 

Use the Cost Performance Index to measure project cost efficiency

The Cost Performance Index is a measure of the financial effectiveness and efficiency of a project, and represents the amount of work completed for every monetary unit spent. Project managers can use CPI to measure the cost efficiency of software projects against the work actually completed for an early flag that budget or scope adjustments need to be made. Simply put, it is a way of demonstrating whether or not your project is on budget and performing.

Using the CPI will give you an honest view of the cost efficiency of budgeted resources as a ratio of earned value to actual costs. 

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The power of one

You can calculate the Cost Performance Index by dividing the Earned Value (EV) by Actual Cost (AC). When we talk about Earned Value (EV), we are talking about the amount of the task that is actually completed compared to what was planned to be done by a particular stage. It is expressed in terms of the budget set for the project. For instance, if the budget is $10,000 but only 20% of the work has been completed halfway through the six month project timeframe, then the EV is $2,000. The Actual Cost (AC) is the amount of money that has been spent on the task.

So, CPI = EV / AC 

For example, if a project has an EV of $30 000 but the AC is $15 000, the CPI is 2. 

But what does that mean?

CPI < 1 – a CPI that is less than one means the earning is less than the amount spent. You can say the project is over budget. 

CPI > 1 – a CPI that greater than one means the earning is more than the amount spent. This is when you can happily say that the project is under budget. 

CPI = 1 – a CPI equal to one means the earning and spending are equal. Everything is going according to plan and the project is performing well. 

The upside and downside of technology

In this digital age, you know that technology not only enables your business but powers it. There is a downside though. Software needs constant maintenance and frequent upgrades. Don’t consider maintenance or upgrade projects as a nuisance. Instead, see upgrades as an investment into better efficiencies, seamless continuity, improved productivity, more features, greater functionality, happier employees, more engaged customers, tighter IT security and reduced risks. The list of rewards from optimised software goes on, and they translate into business growth. Maintaining your software systems will ensure that they are up-to-date, bug-free, cyber-secure and working as they should. 

Hand it over

Budget, skills and resourcing constraints will impact the progress and ultimate success of your software projects, whether it’s a new app development or a website upgrade. Poor planning leads to slow progress and failing to reach the goals you want to achieve. You want a CPI equal to one or more if you want the most bang for your buck.

Not your forte? Hand it over. At Digital Grind we eat, sleep and drink this stuff. We have an established team of tech experts who understand the software development, maintenance and user experience design landscape. We also know that getting ROI on software projects is important to our clients. So planning and sticking to budget and project timelines is non-negotiable. We aim for a CPI of one or more on every project we undertake. Have a look at what we did for Moro Hub. 

Got a goal or a project in mind? Start it now with Digital Grind.

Digital transformation has become one of the most talked about topics in the last few years. But what does it really mean? What are the key areas where digital transformation is happening? How can you be sure that your business is ready for the changes ahead?

Unsurprisingly, the COVID-19 pandemic has forced many businesses to fast track their IT strategies which is evidenced by an increase in global spending. It was reported that IT spending is set to reach 4.1 trillion in 2021, up 8.4% in 2020.

It is something that every business needs to consider or you’ll get left behind and suffer the consequences. But should anyone really be spending so much on their IT? Let’s find out.

1. Why digital transformation is necessary

Digital transformation is the process of taking your traditional business and using digital technology to modernize it and make it more efficient. It’s a trend that’s happening in every industry, from media to healthcare. 

Many businesses no longer prefer the traditional business model and want to adopt technology that will help them sell more, move faster, and solve customer problems in an easier way. Some of them are using Big Data and AI to shape how they do their business and what tools they use.

Research found that 23% of surveyed companies had little to no dependence on digital technologies in some shape or form. The rest are either fully digital or use a hybrid approach. The numbers speak for themselves when it comes to digital transformation’s necessity. 

But how can businesses adapt and meet the expectations of their clients? Here’s what you need to think about. 

Digital technology entails many changes to how your business works. It will require a lot of resources, like manpower, software and hardware, as well as the different infrastructure needed to operate these tools. 

As many businesses use multiple IT systems, it will be crucial for them to have the right infrastructure to meet the changes and make the digital transformation work efficiently.

2. Data and analytics is everything

Companies that are facing digital transformation should aim to make data-driven decisions that improve their business performance. When it comes to data analytics, it can play a major role in taking your business to the next level.

As an example, Netflix digitizes its audiovisual data in order to make it accessible all over the world. In addition, it’s using Big Data to analyze everything that its subscribers watch, using those insights to inform its business strategy.

The same can be said about creating value in every part of your company. Analytics can help you identify how to improve customer service, better adapt your marketing campaigns, and create better customer experiences. 

The analytics side of business includes data from A/B testing, customer insights, and social listening. It’s evident that data is at the core of influencing business decisions today. 

In order to make data-driven decisions, it’s worth studying your customers’ behaviors across different channels. Track down where they are seeing the most friction or unhappiness around your digital marketing efforts and put processes in place to address it.

3. How businesses can prepare for digital transformation

One study found that almost 90% of respondents were expecting a digital disruption of some sort. However, less than half could actually say they were ready for this change.

Whether you like it or not, digital transformation is going to impact your business somehow. So how can you prepare for this? 

It’s appropriate to start thinking about transformation with collaborative brands, such as Spotify. Here’s why. Sure, Spotify is a music streaming platform, but it also helps you create podcasts, listen to music, watch videos and play games.

Brands, such as Netflix, pride themselves in what they stand for. The company has pulled off a successful digital transformation through collaborative marketing and digital tools.

Collaborative marketing is good business because everyone wins. The biggest win though is that Netflix gained insight into where its users were spending their money and why, so it created its own place.

That insight is priceless, and this is why cultural brands are being actively guarded and developed. Perhaps you remember the first cultural brand you started to work for or one that you realized you could use your creativity to promote? In each and every case, you are helping others realize their career goals. 

Companies know that collaborating with other cultural brands is a good investment. From that point on, the collaborations get bigger and better. 

4. How you can embrace technology to succeed in a transformed market

It’s important to embrace technology so that you can continue to succeed in your business. If you own a real estate brokerage, for example, you’ll need to use the Internet to market your business, to communicate with your clients, stay competitive, and to find new listings. 

The Zillow Group bookmarked certain areas of the Internet where they’re creating new opportunities for the real estate industry. Besides, such sites’ popularity continues to grow, and they can help up-and-coming real estate businesses jump start their digital strategies sooner than is normally possible.

Finding actionable opportunities

The new technology trends worth your attention include smarter searches, intelligent personal assistants, user-aided home automation, and new forms of cloud-based interactivity. Want to be a part of this movement? Then start doing on-page SEO to make sure that people are finding your business when they need it. 

Big-box stores, for example, have started increasing the use of self-checkouts, zero-contact security, screenless entrances, and high-speed internet to serve patrons through the COVID-19 outbreak. In sum, the grocery industry has added high-tech ways to serve its customers in times of high demand.

Since such trends are expected to continue, many real estate transactions might take place online if market participants play their cards right. 

Intelligent personal assistants can do much more than help computers with repetitive tasks. They can take the user’s orders and turn them into reality. 

For example, smart refrigerators can be programmed to return milk late in the day so it doesn’t go to waste. Digital transformations are happening at a rapid pace, and you need to be sure that your business is ready to take advantage of the changes ahead.

Today, we live in a digital world where the Internet and social media have changed the way we live and work. Digital transformations are happening at a rapid pace, and you need to be sure that your business is ready to take advantage of the changes ahead. 

Following these steps will help you see the benefits of these digital transformations. And the most important responsibility is to be ready to make these changes for your business. 

Other things to consider

Digital transformation cannot be achieved in a vacuum. It also requires the constant changing of business models and having a strong team in place to help you run the entirety of the race. Here are a few things to consider for if and when you decide to embark on your digital transformation journey.

• Diversify. Diversification helps you preserve capital, protect your company from swings in the market, and minimize your risk. Diversity gives you an opportunity to find new routes to grow your business and protect your investment. Leave old routes for dead!

Be prepared. In times of crisis, consumers rush to buy the products and services that retain their loyalty and high price. Make sure that what you sell is of high quality, has a perfect fit for your consumer, and solves a problem.

• Incorporate technology. Technology is everywhere. Digital transformation is bringing the latest apps, platforms, technology, and systems into your business, making it easy for your workforce to work and making your business successful. If you have a modern and comfortable work environment where everyone can access information and communication technologies easily, you are ready for digital transformation.
• Network and engage your team. The LinkedIn and Facebook groups are top-of-mind when companies plan for new opportunities and reach out to professionals that they are interested in. Facebook groups are super-easy to create, join, and manage.

Digital transformation is an inevitable part of any business or organisation’s operational strategy in the 21st century. It’s been established that this is a necessary endeavour that requires preparation and embracing of technology as you focus on the four aspects.

Digital Grind knows all about your digital transformation journey and is well endowed with the necessary expertise that can take you through this journey. Speak to us to learn about some of the digital solutions your organisation can put in your arsenal.

Often, a big decision when starting a new software project is whether or not to outsource development or simply do it in-house. The most common reason for this concern to pop up is that companies have heard about bad experiences from friends or colleagues, or they’ve experienced it themselves.

After all, working with third parties can come with its challenges. But as with everything in life, proper planning prevents poor performance - and this applies to outsourcing tasks as much as it does to anything else. 

How does this dilemma come about?

Upgrading software is a critical task for any modern business and can improve a company’s productivity by as much as 50%. Apart from this, new systems are more adaptable and have better security, a key factor in today’s data landscape.

According to Norton, one of the most used antivirus softwares in the world, new software and upgrades can help get rid of old flaws. Hackers and cybercriminals are constantly getting better and you should too, to make sure your company’s data and systems are safe and efficient.

In the same breath, companies don’t always have the resources to allocate time and internal spend to technical projects and need support, to a greater or lesser degree.

5 Questions To Guide You

Every situation and every upgrade is different. It is vital for you to do a thorough analysis of your project, plan out your goals and timeline before deciding who’s going to be responsible for the task of upgrading - and to what extent they’re involved. Key decision-makers should ask themselves:

What is the scope of the upgrade or new development?

The most important question to find an answer to when upgrading your software is why you are doing it. The key objectives you use as a mark, serve as vital information for the development team, and can help you figure out priority and critical areas for development. This will impact the level of resources you need to continue and give you a basis for understanding when and what you can get help with.

Do you have the skillset, internally - and is it your core competency?

Sit down with your team and find out if they have the ability to develop the best possible software. 

Building software is a complex process and the benefit of having an outside company is they can have access and knowledge on the latest technology that is being used. (Maxxor Blog) However, many companies don’t have in-house development teams because of the cost or demand for that kind of work on a monthly basis. 

On the other hand, some companies do software development for other brands, as their core service offering and this presents an ethical and logistical dilemma. When a skill is your company’s core competency, outsourcing this skill makes your business vulnerable. In these cases, it’s best to enlist temporary or supporting development, rather than putting an entirely separate team on the project. 

Do you have capacity?

Does your team have the ability and capacity to do this work while continuing to service your company on a daily basis? Very few businesses can afford a software team solely for building new products. This means that they are constantly dividing their time between your upgrades and their daily tasks. 

Your team may have the skills and the experience to get this job done but do they have the capacity with everything else going on? If yes, then you could think about doing it in-house as a priority - even if the cost is higher than that of partnering with other developers. If no, then it may be more effective to look at outsourcing the work to some extent.

Is your internal infrastructure set up for partnerships?

Agility in the software world is key and can help create environments where partnering with service providers is easier. Without the right communications and data-sharing infrastructure, it will be a complex task to plug in new teams and can create a myriad of challenges when working with freelancers or other organizations.

If your internal infrastructure is not geared up for remote and collaborative working, you’re going to have a problem. In these instances, you need to factor in the costs of creating this environment, although the benefits can be two-fold for your business. If you can’t do this, starting in-house may be a more viable option. 

What is your budget?

Budget constraints play a major role when going into a new project. And while the face value of one option may be cheaper, you need to take into account the cost of mistakes, setbacks, and not reaching the goals you want to achieve. Besides that, the training and infrastructure costs internally can add up fast and need to be considered. 

It may seem cheaper to hire more staff but will you have work for them after this project is done? Further to that S&C says “Businesses cut down their development costs up to 50-60% when they turn to an outsourcing company”. 

Typically, there is a lesser risk and cost associated with outsourcing, as you are not bound to permanently employ developers and not responsible for the overheads associated with third parties, however, in cases where they are too far removed from your team, you are likely to incur quality control and time costs. 

Who can you outsource to?

There are many companies that offer software development services, but quality and competency are two important considerations. At Digital Grind, we’ve got an established team of digital experts who understand the software and user experience design landscape. 

For example, we recently worked on a project with Moro Hub where we built a platform with an A-grade standard of accessibility. In that instance, the infrastructure existed for us to work together as a team and the result was an exciting new platform that could help Moro grow their brand awareness and continue to evolve. Their feedback? "Digital Grind developed our company's website, and they have done an excellent job. They developed a website that was more than our expectation and it is AAA accessible. They were very cooperative and accommodating; their flexibility in amending changes to meet our different stakeholder's requests was exceptional."

So, there are definitely instances where partnering or outsourcing your development can be beneficial to you and your organization. However, considering the checklist above, you will need the right processes and environment to make this achievable and should be aware of your core competencies - and the impact that outsourcing can have on your brand and clients. 

When it’s not your game, it’s best to handoff to an all-star team. Speak to us