Should you outsource software dev?

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...

Share this Article

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. 

Outsourced Software Development

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 


Let's Work Together

We grind digital tech to fuel brands and ignite possibility. Specialising in providing quick turnarounds, scalable solutions and piece of mind that your product are in the best hands to take your business and product to the next level.

get In touch
Content Offer
About
Brandon Busuttil
10 years immersion in the marketing, events and digital sectors, accompanied by an honours degree in Marketing Management. An unmistakable passion for connecting brands and people, fuelled by an entrepreneurial ‘make–it–happen’ approach to life.

Continue reading

arrow icon
Digital transformation has become one of the most talked about topics in the last few years. But what does it really mean?

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.

Welcome to our blog on 5 tips for successful IT project management! Discover essential strategies to drive your IT projects to success.

Introduction

Welcome to our blog on 5 tips for successful IT project management! In today's fast-paced and technology-driven world, efficient management of IT projects has become crucial for organizations to stay competitive and deliver successful outcomes. Whether you're overseeing the implementation of a new software system, a website development project, or an infrastructure upgrade, effective project management is the key to ensuring smooth execution, on-time delivery, and meeting business objectives. In this blog, we will share valuable insights and practical tips to help you navigate the complexities of IT project management. From defining clear project objectives to fostering effective communication and managing risks, we will explore the essential strategies that will empower you to drive your IT projects to success. Let's dive in and discover how to make your IT projects shine with effective project management practices!

What is IT Project Management

IT project management is the discipline of planning, organizing, and overseeing technology projects to ensure their successful execution. It involves managing the various aspects of a project, including defining project objectives, allocating resources, establishing timelines, and monitoring progress. The role of an IT project manager is to lead the project team, facilitate effective communication, and mitigate risks to ensure that the project is delivered on time, within budget, and meets the desired outcomes.

In today's technology-driven world, IT project management plays a crucial role in organizations of all sizes and industries. It enables businesses to leverage technology to drive innovation, streamline processes, and achieve strategic goals. Effective IT project management requires a combination of technical knowledge, leadership skills, and the ability to navigate the complexities of technology projects.

As an IT project manager, you are responsible for defining clear project objectives, identifying project stakeholders, and ensuring their alignment with the project goals. You must possess strong communication skills to facilitate collaboration among team members, stakeholders, and vendors. Additionally, you need to have a solid understanding of technology and its implementation process to make informed decisions and effectively manage project risks.

Successful IT project management also relies on effective resource management, including allocating resources based on project requirements, tracking resource utilization, and ensuring their availability throughout the project lifecycle. Additionally, you must be adept at managing project timelines, identifying and addressing potential bottlenecks, and adapting to changes or unforeseen circumstances that may arise during the project.

By embracing the principles of IT project management and mastering the necessary skills, you can navigate the challenges of technology projects and deliver successful outcomes for your organization. In the following sections, we will explore five key tips that will help you excel in IT project management.

Now that we have established the fundamentals of IT project management, let's dive into five essential tips that will set you on the path to success. These tips will equip you with the knowledge and strategies to effectively manage your IT projects and deliver exceptional results. From project planning to team collaboration and risk management, these insights will help you navigate the complexities of technology projects with confidence and achieve your project objectives. Let's explore these tips in detail.

Tip 1: Define Clear Project Objectives and Scope

Defining clear project objectives and scope is the foundation for successful IT project management. It sets the direction and boundaries for your project, ensuring everyone involved understands the goals and deliverables. Here's how you can effectively define project objectives and scope:

  1. Establish Clear Goals: Start by clearly articulating what you aim to achieve with your project. Define specific, measurable, attainable, relevant, and time-bound (SMART) goals that align with your organization's overall strategic objectives. This will provide a clear vision and purpose for your project, guiding all subsequent activities.
  2. Create a Project Charter: Develop a project charter that outlines the project's purpose, objectives, stakeholders, and high-level requirements. This document serves as a reference point throughout the project, ensuring that everyone is on the same page. It helps in establishing project governance, clarifying roles and responsibilities, and obtaining necessary approvals.
  3. Conduct Stakeholder Analysis: Identify key stakeholders and their roles in the project. Engage stakeholders early on to gather their input, address concerns, and ensure their expectations are aligned with the project's objectives. By involving stakeholders from the beginning, you can gain valuable insights, foster collaboration, and manage potential risks or conflicts more effectively.
  4. Define Project Scope: Clearly define the boundaries of your project, including what is included and excluded. Document the project's deliverables, features, and functionalities, as well as any constraints or limitations. This ensures that everyone understands the project's boundaries and avoids scope creep, which can lead to schedule delays and increased costs.
  5. Develop a Scoping Document: Create a detailed scoping document that outlines the project's scope, objectives, deliverables, timelines, and resource requirements. This document serves as a comprehensive reference for all project participants, providing a clear roadmap for project execution. It helps in managing expectations, communicating project requirements, and facilitating effective decision-making.

By defining clear project objectives and scope, you establish a solid foundation for your IT project. It provides clarity, direction, and alignment, enabling your team to work towards a common goal. With a well-defined scope and objectives, you can effectively manage resources, mitigate risks, and deliver successful outcomes.

Once you have established clear project objectives and scope, the next crucial step is effective project planning and scheduling. In the next section, we will explore Tip 2, which will provide valuable insights on how to plan and schedule your IT project to ensure smooth execution and timely delivery.

Tip 2: Develop a Robust Project Plan

A well-defined project plan serves as a roadmap for successful IT project management. It encompasses various crucial components that contribute to project success.

Firstly, a comprehensive project plan outlines the timeline, setting clear deadlines and milestones for different project phases. This helps keep the team on track and ensures that tasks are completed within the designated timeframe. Additionally, the plan identifies key deliverables, outlining the specific outcomes expected from the project. This clarity enables effective monitoring and evaluation of progress.

Developing a detailed project plan offers several benefits. It enhances communication and collaboration among team members, ensuring everyone understands their roles and responsibilities. A clear plan also helps manage resources effectively by identifying the necessary personnel, equipment, and budget required for each phase of the project.

Creating realistic project schedules is essential for successful implementation. Consider the complexity of tasks, potential dependencies, and the availability of resources. By managing dependencies effectively, you can mitigate risks and ensure smooth progress throughout the project. Regularly monitor and update the project schedule to adapt to any changes or challenges that may arise.

In summary, a robust project plan sets the foundation for successful IT project management. It provides a clear roadmap, improves communication and resource management, and allows for effective monitoring of progress. In the next section, we will discuss Tip 3, which focuses on effective communication and collaboration strategies to keep your project team aligned and engaged.

Tip 3: Effective Communication and Collaboration

Communication is the lifeblood of successful IT project management. Open and transparent communication among team members and stakeholders is crucial for project success.

Clear communication ensures that everyone is aligned and working towards a common goal. Regular team meetings provide an opportunity to discuss project progress, address challenges, and brainstorm solutions. These meetings foster collaboration, allowing team members to share their insights, ideas, and concerns. Additionally, status updates and progress reports keep everyone informed about the project's status, milestones achieved, and any potential roadblocks.

Maintaining effective communication channels is essential. Utilize project management tools and platforms that facilitate real-time collaboration and information sharing. This enables seamless communication, regardless of team members' physical locations.

To foster collaboration, encourage an open and inclusive work environment where team members feel comfortable expressing their opinions and sharing their expertise. Foster a culture of trust and respect, encouraging active participation and valuing diverse perspectives.

In addition, establish clear channels for feedback and encourage regular communication with stakeholders. Keeping stakeholders informed about project progress and involving them in key decisions fosters a sense of ownership and engagement.

By prioritizing effective communication and fostering collaboration, IT project managers can build strong relationships, ensure transparency, and drive project success. In the next section, we will explore Tip 4, which focuses on risk management and mitigation strategies to anticipate and address potential challenges in IT projects.

Tip 4: Risk Management and Mitigation

Effective risk management is essential for successful IT project management, as it helps identify and address potential challenges before they escalate. By proactively managing risks, you can mitigate their impact on project timelines, budgets, and deliverables. Here are some strategies and tools to implement effective risk management:

First, it is crucial to identify and assess potential risks that may arise during the project lifecycle. Conducting a comprehensive risk assessment allows you to understand the probability and impact of each risk. Tools like risk registers, SWOT analysis, and brainstorming sessions can aid in capturing and evaluating risks effectively. Maintaining a RAID (Risks, Assumptions, Issues, Dependencies) log is also valuable, as it provides a centralized repository to track and monitor all project-related risks.

Once risks are identified, developing a risk management plan becomes paramount. This plan outlines the approach for mitigating and responding to risks throughout the project. Consider utilizing risk assessment matrices, failure mode and effects analysis (FMEA), and agile risk management frameworks to prioritize and manage risks efficiently. Regularly review and update the risk management plan to ensure its relevance throughout the project lifecycle.

Contingency planning is another critical aspect of risk management. By anticipating potential disruptions and having backup plans in place, you can minimize the impact of unforeseen events. Establishing clear communication channels, defining escalation procedures, and having a response strategy for different risk scenarios contribute to effective contingency planning.

Remember, risk management is an ongoing process. Regularly monitor and reassess risks as the project progresses, and adjust your mitigation strategies accordingly. Agile methodologies, such as Scrum, incorporate risk management activities within their frameworks, enabling teams to address risks during sprint retrospectives and adapt their approach.

By implementing robust risk management practices, maintaining a RAID log, and utilizing appropriate tools and frameworks, you can proactively identify, assess, and mitigate risks, ensuring project success.

Tip 5: Monitor and Evaluate Project Performance

Keeping a close eye on project performance is crucial for successful IT project management. Monitoring progress, tracking key performance indicators (KPIs), and conducting regular project reviews allow you to assess the project's health and make informed decisions. Here's how you can effectively monitor and evaluate project performance:

Reviewing Burn-up and Burn-down Charts: Burn-up and burn-down charts provide visual representations of project progress. Burn-up charts show the cumulative completed work over time, while burn-down charts track the remaining work. Regularly reviewing these charts helps you gauge if the project is on track, identify potential delays or bottlenecks, and take proactive measures to keep the project on schedule.

Assessing Resource Utilization: Monitoring resource allocation and utilization is essential to ensure optimal project performance. Reviewing resource usage reports and analyzing if resources are allocated efficiently helps you identify potential overutilization or underutilization. Adjusting resource allocation accordingly ensures that the project has the necessary capacity to meet its goals while avoiding unnecessary strain or idle resources.

Evaluating Documentation and Deliverables: Regularly reviewing project documents, such as project plans, requirements, and design documents, ensures their accuracy, completeness, and alignment with project objectives. Additionally, assessing deliverables against predefined quality criteria helps maintain the desired level of quality throughout the project lifecycle.

Tracking Risks and Issues: Continuously monitoring risks and issues is vital for effective project management. Keep a RAID (Risks, Assumptions, Issues, Dependencies) log to document and track potential risks, known issues, dependencies, and assumptions. Regularly reviewing the RAID log allows you to proactively manage risks, address issues promptly, and minimize the impact on project progress.

Implementing Effective Change Control: Change is inevitable in IT projects. Establishing a change control process ensures that any modifications or additions to project scope, requirements, or deliverables are properly evaluated, documented, and approved. Regularly reviewing change requests and their impact on project objectives helps maintain project focus and avoid scope creep.

By regularly reviewing burn-up and burn-down charts, assessing resource utilization, evaluating documentation and deliverables, tracking risks and issues, and implementing effective change control, you can monitor and evaluate project performance effectively. These practices enable you to proactively address challenges, ensure project alignment, and deliver successful IT projects.

Conclusion

In conclusion, successful IT project management requires a combination of skills, knowledge, and experience. To thrive in this field, consider obtaining key certifications and courses that can enhance your project management capabilities. Here are some valuable certifications and courses to consider:

  1. Project Management Professional (PMP) certification: This globally recognized certification demonstrates your proficiency in project management principles, techniques, and best practices.
  2. Certified ScrumMaster (CSM) certification: This certification focuses on Agile project management methodologies, enabling you to effectively manage projects using Scrum frameworks.
  3. PRINCE2 Foundation and Practitioner certification: PRINCE2 provides a structured approach to project management, equipping you with valuable tools and techniques for successful project delivery.
  4. Certified Associate in Project Management (CAPM) certification: This certification is ideal for those starting their project management journey and provides a solid foundation in project management principles and terminology.
  5. ITIL Foundation certification: ITIL (Information Technology Infrastructure Library) is a framework for IT service management and can be beneficial for managing IT-related projects.

Investing in these certifications and courses can expand your knowledge, validate your skills, and boost your career prospects in IT project management. Stay updated with the latest trends, methodologies, and tools in the field to continuously enhance your expertise.

At Digital Grind, we understand the significance of seamless project delivery and the critical role of project managers in achieving that goal. Our team consists of certified project management professionals who are well-versed in industry best practices and methodologies.

By partnering with Digital Grind, you can benefit from our expertise in IT project management. Our project managers will ensure the smooth execution of your projects, from initiation to completion. They possess the necessary skills to effectively manage resources, mitigate risks, and maintain clear communication throughout the project lifecycle. With their guidance and support, you can achieve project success while focusing on your core business objectives.

Get in touch today to discover how Digital Grind can assist you in delivering successful IT projects. Let our experienced project managers take the lead, allowing you to concentrate on driving innovation and growth within your organization. Together, we can navigate the complexities of IT project management and achieve your desired outcomes.

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 outs...

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. 

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

CPI > 1a 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 = 1a 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.