7 proven ways to reduce enterprise software development costs

Enterprise software development is expensive – but it doesn’t have to be.

Many companies waste millions every year on bloated teams, building unnecessary features, and inefficient processes. 

And poor planning, scope creep, and the wrong tech choices drive costs up fast.

But, with the right approach, you can build high-quality software while keeping costs under control. 

In this article, we’ll discuss 7 proven ways to reduce enterprise software development costs without cutting corners.

Let’s dive in!

How much does enterprise software development cost on average?

There’s no one-size-fits-all answer to this question.

Every project is unique and enterprise software development costs vary widely.

Costs mainly come down to your project’s scope, complexity, team size, and tech choices. 

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So, pinning down how much development will cost you isn’t easy.

But, here’s a broad range you can expect, depending on complexity:

• Small-scale enterprise software – $100,000-$250,000
• Mid-size custom solutions – $250,000-$500,000
• Large-scale enterprise platforms – $500,000+

A (relatively) simple internal tool built by a small team will be much cheaper to build than a complex, enterprise-wide solution with a bunch of third-party integrations.

Also, keep in mind these are just development costs. 

You also need to plan for long-term costs like maintenance, updates, and employee training.

But, just because a project is complex, it doesn’t mean it has to break the bank.

Next, we’ll show you how to reduce costs without sacrificing quality.

Top ways to reduce enterprise software development costs

Here, we’ll cover the best ways to reduce enterprise software development costs.

Outsource development

Outsourcing is the best way to cut enterprise software development costs, bar none.

You get access to top-tier talent at a much lower cost than hiring and maintaining an in-house team.

And once you crunch the numbers, it’s no surprise why it’s so popular.

According to a study by Existek, outsourcing development can help you cut development costs by up to 53%:

source: Existek

Here’s exactly how outsourcing reduces costs:

• Lower labor costs – Hiring in-house developers in the US or Western Europe can cost $150,000+ per year per developer. Outsourcing to nearshore or offshore locations will help you lower those expenses without sacrificing quality.
• No recruitment or onboarding expenses – Finding and training in-house developers is costly and time-consuming. Outsourcing allows you to quickly scale up development.
• Flexible team sizes – You can expand or shrink your dedicated team based on project needs, so you don’t pay for idle developers between projects.
• Faster delivery – Experienced development agencies have established workflows and processes, which helps them deliver software faster.

But, there’s a catch.

If you want to reap any of these benefits, you need to find the right development partner first. 

And that’s easier said than done.

Now, we won’t go into the process (too) much – you can read more about that here.

But, we’ll give you a surefire way to recognize if a company is the right fit. Here are the traits you need to look for in a potential partner:

• Flexibility and proactivity – Do they actively ask questions and propose solutions? Can they adapt if requirements change?
• Work ethic and cultural compatibility – Are they serious about their work? Do they “get” your culture?
• Transparent and accurate communication – Do they answer all of your questions? Will they tell you “no” if your idea isn’t feasible to make?

Remember, outsourcing shouldn’t be just about cutting costs – it should be about maximizing value. 

The right development partner will be fully dedicated to your project and care just as much as an in-house team.

And that’s exactly what you should be looking for.

Key tips for outsourcing development

Validate your idea first

Building software without validating the idea first is one of the fastest ways to waste money.

We’ve all heard this familiar story – a huge company investing millions into development, only to end up with a half-baked solution that doesn’t meet expectations.

And this is a persistent problem with huge projects.

According to McKinsey, 33% of large-scale projects take longer than planned to complete and 66% end up going over budget:

source: McKinsey

Validating your idea before development is the best way to avoid becoming a part of these statistics.

So, how do you do it?

For a start, you need to talk to real users. Your idea needs to actually solve their problems and meet their needs.

Also, if you’re planning to build a complex solution, you should build a proof of concept (PoC).

This way, you’ll make sure it’s actually technically feasible before heavy investment.

In short, validating your idea will ensure development is focused on meeting your real needs. 

And the earlier you validate, the less you’ll spend on fixing mistakes.

Key tips for idea validation

Build a minimum viable product (MVP)

Developing a fully featured enterprise solution from the start is expensive and risky. 

And that’s where a minimum viable product (MVP) comes in.

When you build an MVP, you only build the core features and functionalities before refining it based on real feedback.

Now, MVPs are usually associated with startups – but that doesn’t mean enterprises can’t build them.

Still, there are some differences between MVP development for startups and for enterprises you need to know:

MVP development for enterprises vs. startups: overview

Enterprise-grade MVPs are usually more complex and take longer to build than the typical startup MVP.

Nevertheless, they’re still much cheaper than building a fully-featured enterprise-grade software solution.

Plus, this comes with another benefit – lower risk.

When you start small with an MVP, you drastically lower the risk of large-scale failure.

And if your initial idea doesn’t work or requirements suddenly change mid-development, you can much more easily change course.

Just remember, your MVP is just the starting point.

The goal is to learn, adapt, and refine your idea before committing to full-scale development.

And that’s key to long-term success.

Key tips for building an enterprise-grade MVP

Control scope creep

Scope creep is one of the biggest project killers out there.

And too many enterprise projects fail because they try to do too much at one.

But, how does scope creep happen? And how can you prevent it?

Scope creep happens when you add new features or make changes to the original project scope without proper evaluation.

Now, these additions may seem small at first. How much damage can adding a simple feature do?

Well, if you’re not careful, this can balloon your initial scope and leads to higher costs and stretched timelines.

For a more in-depth discussion about scope creep, you can watch this episode of The Roadmap with DECODE co-founder and CEO, Marko Strizic:

In a nutshell, scope creep leads to:

• Longer development cycles – Each new feature or change adds time and can delay releases.
• Higher labor costs – More development hours means higher expenses.
• More technical debt – Rushed features cause bugs which require costly fixes down the road.
• Loss of focus – Your team wastes time on unnecessary changes instead of improving core functionality.

The key to controlling scope creep is good planning.

Make sure to clearly define project requirements before writing a single line of code and limit changes during development.

If you have to make changes, make sure to thoroughly evaluate every change before approving it.

A controlled scope will keep your project on time and within budget while keeping your team focused on delivering real value.

And that should always be your goal.

Key tips for controlling scope creep

Invest in the right tech stack

Choosing the wrong tech stack can cause serious issues. 

High maintenance costs, poor scalability, and security risks – you name it.

You don’t want to find yourself building with outdated or overly complex technologies only to spend millions later on migrations and fixes.

So, a flexible, scalable, and cost-effective tech stack is essential for long-term success.

Now, we can’t give you a simple answer on which tech stack to choose.

Your choice will depend on your specific requirements, your team’s expertise, and target platform(s).

But, here are some of the most commonly used tools in enterprise software development:

• Programming languages – Java, C#, Python
• Backend frameworks – Spring Boot, .NET, Ruby on Rails
• Frontend frameworks – Angular, React, Vue.js
• QA and testing – Selenium, Cypress, Jest
• CI/CD and DevOps tools – Jenkins, GitHub Actions, Bitbucket Pipelines
• Cloud services – AWS, Microsoft Azure, Google Cloud
• Databases – PostgreSQL, MySQL, MongoDB

If you want to cut tech stack costs, you should prioritize using open-source tools to avoid licensing fees and vendor lock-in.

Another good tip is choosing widely adopted and available tools to make future hiring easier, which will cut your long-term expenses.

Also, make sure your tech stack works well with the legacy systems and third-party services you use on a daily basis.

In short, picking the right tech stack means balancing performance, scalability, and cost-efficiency. 

And a smart investment today will prevent expensive rework and migrations later.

Key tips for investing in the right tech stack

Automate testing and deployment

Manual testing and deployment slow down development and increase costs. 

And automating these processes will improve your team’s efficiency and reduce human error.

You shouldn’t underestimate the impact this can have on your project.

Automated testing helps you detect any bugs and issues early.

And the sooner you catch them, the cheaper they are to fix. Fixing issues right at the start can be up to 100x cheaper than fixing them after deployment:

But, automated testing is just one piece of the puzzle.

You should also implement:

• CI/CD pipelines – Automate code integration, testing, and deployment so you can deploy new versions in minutes, not hours.
• Infrastructure as code (IaC) – Automate cloud provisioning to reduce overhead and improve efficiency.
• Monitoring and logging tools – Real-time alerts will help you detect and fix issues before they escalate.

All of this leads to faster releases, fewer bugs in production, and less manual effort. 

And once you add that up? Lower costs and better software quality.

Key tips for automating testing and deployment

Optimize team structure and development processes

An inefficient team structure can bleed you dry.

Having an overstaffed or understaffed team leads to slower development, communication breakdowns, duplicated efforts, and teams working in silos.

And this can completely derail your project and waste valuable resources.

A good tip here is following Amazon’s “two-pizza rule”. Your team should be small enough that 2 pizzas can feed the entire team.

Also, make sure to break any silos between different teams. Your designers, developers, QA engineers, and business stakeholders should always be on the same page.

On top of that, if you haven’t already, you should implement a structured Agile methodology like Scrum.

Scrum breaks development down into short (2-4 week) iterations called sprints, with each sprint being a mini development cycle.

This approach helps you keep development focused and structured while keeping your team focused.

The best development teams are lean, well-organized, and highly collaborative.

And that’s key to keeping costs under control.

Key tips for optimizing team structure and development processes

How to reduce enterprise software development costs: FAQs

Need a high-caliber development team?

Are you looking for a top-notch development team but can’t seem to find the right partner?

Well, you’re in the right place.

We’re an EU-based, full-service software development company with 12+ years of experience building complex, enterprise-grade custom software for some of the world’s biggest companies.

And no matter how complex your project is, we’re confident that we’re up to the challenge.

If you want to learn more, feel free to reach out and our team will be happy to reach out to discuss your needs further.