Managing budgets effectively is vital for the financial health and ROI of any web or app development project. Every step, from design to post-launch, involves a complicated mix of costs that needs strategic handling. For businesses like Conferensity, aiming to expand their digital offerings, mastering budget control isn’t just good practice—it’s central to their strategic goals and project success.
You may not have heard of Conferensity. That’s okay, they don’t exist. We’re using them in this article (and other articles) as a way to discuss the strategies we cover. Their story in short:
Conferensity is currently a B2B event management platform with pretty basic features. Their primary goal:
“To become a comprehensive conference solution and enjoy the increased market share and revenue possibilities this will create.”
It’s a fine dream.
Their strategy involves expanding their web-based software’s capabilities and developing two apps – one for conference admins and another for attendees.
While these are three digital products, 1 website and 2 apps, there is actually a fourth project – the updated backend that will implement the features the website and apps will provide interfaces for. This backend will also require extensive work to provide all the necessary admin features to manage the new frontend features.
Now, understanding and managing development costs requires careful planning plus the flexibility to handle unforeseen financial challenges. Using Conferensity as our stand-in for just about any business, we’re going to talk about strategies for budget planning, staying within budget, and leveraging cost management to achieve business growth.
Budget Planning in Web and App Development Is A Must
Yes, this is stating the obvious: Budget planning is crucial in web and app development. It is about investing the time (lots of time) and the brain power (also lots) to get the right numbers next to the right actions.
Once you’re through your first iteration of your budget (you will be updating it as you progress), you have:
- a solid framework to assess ROI,
- a catalogue of options to guide your strategic decisions, and
- a clear view into how you will need to allocate resources.
For both startups and established businesses, budgeting is the key to generating ROI and avoiding financial missteps.
The primary purpose of budget planning is finding a way forward despite your constrained resources. Do it well and you will survive the inevitable financial challenges and be able to adapt to project shifts as the real world interferes with your plans, thereby keeping moving toward your goals.
Conferensity has decided to align their work on their site and apps with their growth objectives in three ways:
- Dedicating resources to backend development that supports high-ROI features (like capturing transactions),
- launching Minimum Viable Products (MVPs) for their apps, and
- adopting a phased feature rollout prioritising event attendees (there’s more of them).
This three pronged approach allows them to make the best use of their developer resources while launching growth-focused features into the marketplace.
Breaking Down Development Costs
For software products, at least initially, development costs dominate. Staying on top of development costs is key to effective budget management, from initial design prototypes to post-launch updates.
Initial costs will involve user research (don’t skip this) accompanying prototype development. For Conferensity, development costs form the lion’s share of their budget, including the frontends (for the site and two apps) and the shared backend infrastructure.
Infrastructure expenses, including hosting, third party integrations, and payment gateways, are vital for Conferensity’s app performance, especially for real-time features.
Unexpected costs are inevitable, requiring a contingency budget for unforeseen challenges. But, if you’ve gone deep enough in your planning, these unexpected costs should be arising out of the truly unforeseen – accidents, natural disasters, and the like. Your development budget should have margins to account for the acknowledged “slippage” that always occurs in software development.
For these unexpected costs, reserving a portion of the budget as a contingency is crucial. It’s painful to pull this money out of line items and see your timeline shift into the future. But the contingency is a necessary de-risking step so you will make it to the end. If you’re betting your business’s future on a project you want to stack your odds so you can be sure you’ll finish it.
Stretching cash, shrinking time – strategies for budget control
Budget control is about finding ways to accomplish as much as possible within your resource constraints. Key strategies include prioritising based on ROI to start generating revenue as quickly as possible, adopting lean development approaches to push value to your users, and making strategic decisions between a pure in-house development model or augmenting your developers with a software development team extension to compress your timeline.
For businesses like Conferensity, focusing on high-ROI features, such as an attendee app, can ensure immediate revenue impact. Employing a lean methodology helps in launching with essential features and iterating based on user feedback, optimising resources and aligning with market needs.
Because Conferensity was a web-first product, they had the inhouse skills for the web app and the backend. Rather than lose a big chunk of time to re-skilling their developers, and then losing more time spreading the same team across more products, they opted to run with a software development team extension.
Sourcing new team members from a near-shore provider, Conferensity had instant iOS and Android developer skills inhouse. These developers were also less costly, letting them stretch their development budget over more developer hours and advance production of both apps alongside the website.
Managing costs once you’re up and running
Once a project is underway, you need effective cost management to keep it on the tracks. Continuous assessment of costs and scheduling is a necessity. There are too many software options for tracking these things, each with their own way of doing things. Too many for us to go into details on how to use any of them.
In broad strokes, part of your process needs to be the regular review of where your project is at and how that compares to your budget plan. Someone should be looking at the numbers weekly. How often you decide to act on those numbers depends on how you’ve structured your development. If you’re doing two week sprints, then you should know as you reach the end of the current sprint what needs to change before you start the next sprint, if anything.
Once you start launching features you need to incorporate their running costs and any revenue (we hope there is revenue) into your reviews. Unless you are incredibly astute, whatever estimates you had for those numbers will have to be updated. The effect of those new numbers on your budget plan are going to have to be followed through. Do you suddenly have more cash to allocate? Are you losing developers to bug fixes or unforeseen infrastructure upgrades?
Good problems or bad problems – your budget plan now has a life of its own. You need to keep on top of costs and schedules to keep the budget aligned with reality so it remains an effective tool for getting the project done.
Tying budget strategy to business growth
Strategic budgeting is foundational for sustainable business growth. In digital products that strategy is built upon the development, serially or in parallel, of different platforms and different features on those platforms.
For Conferensity, aligning their budget with the platforms and features that will best contribute to their business objectives is essential for their big dream of becoming a leading conference solution provider with all the best apps and features.
Making informed investment decisions based on cost-benefit analysis informs the staging of the development of new features. Having the option to choose between inhouse development and development assisted by a software development team extension brings a new level of flexibility in both cost and time-to-market.
Effective budget management allows businesses to scale and adapt to changing market demands without putting themselves at risk. This strategic approach ensures that web and app development projects contribute directly to long-term success and business expansion.
Wrapping up
Budget management is more than fiscal discipline aka bean counting; it’s a strategic element of innovation and long-term success. For businesses embarking on digital projects, like Conferensity, efficiently managing budgets is decisive for aligning development initiatives with business goals, ensuring project viability, and supporting growth.
Adopting strategic budgeting practices, enhanced by the latest management tools and continuous performance monitoring, is critical for navigating digital transformation. It enables businesses to get the most out of the resources they have, seize opportunities that appear beyond their reach, and achieve their vision.
