10 Ways to Avoid Budget Overruns In Software Development

Budget Overruns-In-Software-Development

Fierce competition for clients has led to a change in the way software developers work. Rather than sending an estimate up front and billing the total cost at project’s end, they’re bidding the full amount they will charge for a project. Additional investments have to be agreed on in written change agreements.

As a result, every budget overrun cuts directly into the developer’s profits. It’s critical that executives work with their project managers to ensure things go as smoothly as possible.

Towards that end, here are ten quick tips for keeping budget overruns under control.

Use Agile methodologies

Agile project management is a big reason software failure rates have begun falling for the first time in over a decade. The iterative development process allows for continual feedback and adjustment; small corrections early on have more impact than large changes later on.

Don’t skimp on the Discovery process

Extra time in discovery is the single most influential factor on a project’s success. Taking shortcuts here gives developers a handicap they may never overcome. Without taking time to see the big picture of what clients need, they can’t fully understand a project’s scope. The danger here is that developers could underbid and commit themselves to delivering more than they expected.

Be realistic about how much teams can get done in a sprint

Use historical performance information from similar projects rather than hopeful estimates. When possible use data from the actual team that would be doing the project.

Leave room for error

The most urgent goal may seem to be outbidding the direct competition, but never bid so low that it becomes impossible to deliver profitably. There are always surprises, so plan for them. Include dummy sprints in the budget and timeline to allow for unplanned changes. If they’re not needed, the client gets a pleasant surprise when their software is done early.

Use (and listen to) experienced project managers

80% of high-performing projects are led by a skilled project manager, so resist efforts by the client to trim costs by cutting the position from the budget. Listen to the project manager’s advice and experience during the budgeting phase. Empower them to keep up efficiency and morale within their team with as little micromanaging from above as possible.

Use project management software (and make sure it’s adopted throughout the team)

40% of companies don’t use project management-specific software to manage their projects. There is no reason to juggle spreadsheets and calendar apps when there are powerful, easy-to-use programs (like Basecamp) designed to keep projects orderly and on schedule.

Stay vigilant against scope creep

Don’t view scope creep as inevitable. After all, a thorough discovery process should minimize its effect. This doesn’t mean developers should refuse to make any changes at all; it’s more a reminder that the bid was calculated based on specific requirements. Agreeing to additions and changes outside the scope threatens the budget and the timeline. If a change will affect the project in a large way, go back to the customer and negotiate a change agreement to protect everyone’s interests.

Prioritize automated testing when appropriate 

Automated testing provides wider and more consistent coverage than manual testing. It allows developers to catch problems earlier, when they’re easier to fix. It isn’t applicable to every project, but it saves time and money when it is.

Utilize risk management techniques to mitigate problems as they arise 

Project managers should have both contingency and mitigation plans in place before a project starts. Contingency plans are meant to handle situations which are highly unlikely but could kill a project if they occur. Mitigation plans should minimize the effects of lesser situations which are more likely to appear.

Emphasize communications at all levels 

Communication is the key to staying on budget. There should be a continuous flow of information and feedback between clients and project managers, project managers and their teams, and project managers and senior leadership. Check in after each sprint at the very least. Having knowledge as early as it’s available puts developers in the best possible position to plan, adjust, and act.

It’s impossible to see the future, but following these guidelines lays the groundwork for being prepared to meet unexpected challenges as they arise.

At Concepta, we believe that what’s good for clients is good for developers. Projects that stay on budget can be delivered on time and at a higher quality than those that run over. To explore how much we can achieve within your company’s budget, set up a free consultation with one of our experienced representatives today!

Request a Consultation

Going Digital on a Dime: Handling Business Intelligence on a Tight Budget


As artificial intelligence and automation mature, exciting new business intelligence tools are proving their worth.

It’s hard to deny the results early adopters have seen from those technologies.

For companies struggling to balance business intelligence with other digital transformation efforts, however, the expense of building BI software seems prohibitive.

They need an option that lets them “punch above their weight class” without destroying the IT budget.

The Trouble With Modern Business Intelligence

Using traditional methods, the cost of incorporating AI and automation into business intelligence presents an enormous barrier to entry.

Both require specialized software and dedicated storage space. Companies interested in modernizing their BI practices had to build their own system.

This involved a massive up-front investment in both time and money.

How massive? Even with the actual algorithms and analytical software licensed from a third-party vendor, companies had to:

  • Build on-site servers to store their data.
  • Commission or buy analytics and management software.
  • Hire a data science team to manage business intelligence.
  • Physically maintain and protect the servers.

The process takes a long time to show ROI, and once it does things get complicated.

To continue producing results it needs a steady influx of data.

That means bigger servers, more data scientists to interpret results, and rising peripheral costs (physical security, server maintenance, higher power requirements).

The expense made modern BI methods inaccessible for all but the largest global organizations.

Without those methods, though, businesses have trouble staying in the game.

By 2020 those who don’t effectively use their data will be losing $1.2 trillion to their better-informed competitors every year.

As CIOs realized the potential risks, demand rose for economical BI solutions.

Three game-changing strategies are helping companies regain their competitive edge.

Cloud Storage

The advent of cloud storage has done away with the need to build on-site servers.

Cloud databases function like renting a storage unit: monthly payments cover the actual storage space plus maintenance and physical security.

Because there’s less up-front investment, projects using cloud storage realize ROI in a shorter time frame.

Cloud storage has more than financial benefits. It’s fast and simple to set up. Scaling is as easy as upgrading a subscription.

The servers don’t need to be moved if the company’s physical location changes.

All things considered, cloud storage is hands-down the best option for responsive development.

Software As A Service (SaaS)

Building custom BI software is not always practical for companies without a clear vision of their BI needs.

For budget-conscious companies just exploring the high-tech BI space or for those with relatively routine needs, Software-as-a-service (SaaS) is a better solution.

SaaS can be loosely compared to cloud storage in that it’s a subscription service, but SaaS goes several steps further.

Instead of being simple storage, SaaS is BI software owned and maintained by a third-party vendor.

It’s accessed through the vendor’s site rather than being integrated into a company’s own systems.

SaaS software is usually designed for non-data engineers. That makes it intuitive to learn and use.

The pay-as-you-go subscription model is easy to budget for and has low start-up costs.

Some freemium options have no start-up costs, letting companies get a feel for how they’d use software before committing to premium features.

There are some drawbacks. Because SaaS software is designed for general use by non-technicians, its features may be limited or simplistic.

It’s hard to get exactly what is wanted in one product. Most companies end up using several different products to get the answers they need.

Data usually has to leave the company’s servers to be analyzed on the vendor cloud. That introduces a point of vulnerability for data breaches.

As security becomes a bigger priority, however, SaaS providers are creating solutions that better protect sensitive data.

Discussing security concerns with the vendor should alleviate most of this risk.

Consolidating Data and Analytics

One hidden cost of BI is labor. Especially when the budget is tight, employees are asked to do a lot of the data gathering and preparation manually.

This seems like a low cost solution – but it’s actually a very expensive way to do business intelligence.

When employees are asked to do their own data prep they lose as much as 80% of their workday to tedious, low-value tasks.

Their resulting data is pricier and less reliable than data prepared by software (which isn’t susceptible to human error).

Even when staff is given management tools, time is wasted correlating data from one system to another.

SaaS is easy on the budget, but it does mean using several “almost right” solutions rather than one custom system. 71% of companies admit to using 6 or more data sources while doing BI.

Commissioning a unified reporting dashboard built solves many self-service BI problems.

It costs significantly less than creating BI software from scratch, is easy to train on, and makes data more readily usable on a daily basis.

Plus, it can be added onto if another SaaS solution is added to the system.

Digital on a Dime

Business intelligence doesn’t have to be a tool limited to the Fortune 500.

Using these solutions, every company can spread their BI investment out over time and begin seeing results before traditional companies have finished building their servers.


How accessible is your BI data? Concepta builds intuitive, dynamic BI dashboards to put data in the hands of decision-makers. Set up your free consultation today!

Request a Consultation