Hidden Costs of Software You Need to Anticipate AFTER You Launch
After months of hard work, your software is finally up and
running. But as you’re going through your finances, you notice that your
monthly expenses haven’t gone down—if anything, they’re going up. What’s going
on?
There are hidden costs of software that you need to
anticipate after you launch your project. Honestly, this is something that I
always have to remind my clients whenever they’re developing new software. They
assume that once the project has been developed, the expenses are going down to
zero and they’re done paying. That’s not the case at all, and it couldn’t be
further from the truth.
Here’s an analogy to explain the situation. Let’s say you upgrade from renting an apartment to buying a house. Would you assume that after the down payment, your mortgage will be your only expense as a homeowner? No. Look at your expenses. Your water bill, gas bill, electric bill, and everything else will go up because your house is bigger than your apartment. You might have other expenses creep up on you that you’ve never had before, like a gardener or a landscaper to maintain your property.
Software development is the same.
Whenever you scale up from a small project to a bigger project, there are certain expenses that you’ll incur on an ongoing basis. Everyone is so busy determining the development rates, they forget about the post-launch hidden web development company. In this guide, I’ll explain the top five hidden costs of software you must anticipate after you launch.
Who developed your software? The app development team will continue to maintain your software even after you launch. Your software is going to evolve with the market as new opportunities present themselves. The vision will also evolve based on customer demand.
You always need to remember one thing—stagnant technology is dead technology. Look at companies like Facebook, Google, Twitter, and all of the other global giants out there. They’ve done a pretty good job at developing software, wouldn’t you agree? Everything you can possibly think of has been developed. So why do they have an army of engineers working behind them? Software development is never finished. Between maintenance, new features, customer demand, and just scaling the platform, you’ll always need your staff to maintain this. On average, look at how often mobile apps are updated and enhanced.
Hidden Cost #3: Maintenance
Before your launch, I’m sure you’ve gone through the
technology to make sure that everything was working properly. All the bugs were
found, fixed, and you’re done—right?
That’s not necessarily true, especially in the mobile app
space. While you might have fixed the bugs for certain devices or specific
operating systems, devices evolve over time. When this happens, your technology
or application could regress. Take a look at the average cost to maintain an
app in the first year after launch. Some of you probably know why software
development is expensive. But why is it so costly to maintain? What are
companies spending $10k-$25k+ per year on?
As new demands come from Apple or Google, your compliance
levels might downgrade. New legislation comes into effect for the quality of
your app, the security of your app, or the privacy of your app. All of these
things could change. I’m referring to things like:
GDPR compliance in Europe
CCPA compliance in California
ADA compliance across the US
International compliances
PCI compliance
HIPAA compliance
The list goes on and on. Your technology needs to evolve as
all of these things change.
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Refactoring
Refactoring is another side of maintenance that’s worth
highlighting on its own. The idea behind refactoring is that you write code
that’s just good enough to pass basic testing, compliance, limitations, or
something else. Then you go back and clean it up at a later time. Here’s a
simple visual explanation of how refactoring works.
Some of your code that was put in during development might
have been “good enough” at the time. But as you scale, it must be rewritten to
manage the new traffic load as your business grows. To be honest, these are
good problems to have. It means that your app is growing. But you still need to
anticipate the costs ahead of time to be fully prepared.
Training is the most underestimated expense in terms of hidden software costs. The biggest mistake that people make is assuming that their staff who is maintaining the app is going to stay with them forever. But that’s not going to happen. In reality, some of your staff will make career decisions and leave you. You’ll be unhappy with other team members, and you’re going to fire them. This is just standard procedure when it comes to running a business.
There will always be turnover in personnel. What happens
when you lose someone with crucial domain knowledge? Don’t assume that whoever
you hire will be able to replace that person immediately.
I know some of you might think that engineers are a dime a
dozen, and you can find them anywhere. But even if someone is a blackbelt and
an expert, they will not be an effective part of your team as soon as they come
in. This takes time. So how can you avoid these expensive training costs? The
idea here is to avoid single points of failure with human beings.
You need to cross-train people. Make sure that your capacity isn’t at a bare minimum. Always have at least one spare person. If you only need two people at a minimum, then you should probably hire a third person. So if one person leaves, you’ll still have enough to operate. When that happens, you can always hire someone else as that “spare tire.”
Hidden Cost #5: Strategic Costs
Strategic costs are incurred whenever your business sees a new market opportunity. You need to shift gears quickly to make sure that you can actually address the market need. Lots of times, market needs are time-sensitive. So if you wait six months to take action, it might be too late. In terms of technology, just 34% of companies seek to get first-mover advantage. If you fall into this category, it can give your software a significant edge over the competition. Strategic costs will creep up on your technology and force you to shift gears in terms of your priorities.
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Pro Tips and Best Practices to Prepare For Hidden Software Costs
Now that you’ve seen the top five hidden costs of software
post-launch, it’s time to share some tips that will help you plan accordingly
to anticipate those costs. Spending money after your launch is inevitable, but
you don’t need to break the bank. These tips can help you save some money if
you plan accordingly.
We already established that you need to maintain your staff.
But to help keep costs low, you need to develop them using the golden ratio,
which is something I’ve discussed in previous posts and videos.
Here’s the idea. Use local and remote resources enough, so
the combination is in the correct balance for your business. This type of staff
development will allow you to scale up efficiently without breaking the bank.
Servers vs. Maintenance
We’ve also talked about the hosting costs and maintenance costs, separately. However, these two hidden expenses are actually interconnected. Sometimes it makes more sense to pay more for hosting fees, so you won’t have to maintain as much on your own. For example, let’s say it costs you $1,000 for a fully-managed host. That’s nothing compared to the cost of having a staff member maintain a cloud hosting solution on their own.
So go ahead and pay for it without thinking twice. It’s cheaper and becomes a headache for someone else to deal with—not you. You won’t need a staff member that constantly has to deal with server maintenance. So try to find a hosting provider that will cover these things. While the initial price tag for this service might seem expensive, you should always weigh it against the cost of having an individual from your staff working on it. The hosting cost will always be cheaper in the long run than maintaining it on your own.
Strategic Partnerships
It’s crucial that you have a partner who understands your
technology. This could be your host, an web design agency that you’re working
with, or a platform that you’re integrating with. Whoever it is, make sure that
they understand your vision. It’s important that they have the ability to help
with the big picture during changing times. Opportunity costs and the costs of
making mistakes is extremely expensive.
A strategic partner can save you time if they are an expert
in a particular field. Or maybe they’ve been through this before and already
made mistakes that you can learn from. Your strategic partner is highly
valuable and can save you a ton of money over time.
Anticipate Today, Solve Tomorrow
It’s obvious that you need to anticipate future problems and
opportunities. We’ve been talking about this throughout the entire guide. Anticipate
those problems today, but solve them tomorrow.
Not all of today’s problems do not need to be solved today. You might be developing something right now that’s good enough to get to market without hiring two or three new developers. That’s fine. But you need to anticipate the delayed costs that you’re going to pay for later. This is especially crucial for new businesses. A dollar today is much more valuable than a dollar tomorrow. Be strategic with the debt you incur so that you’re in a good position to address the problems when they eventually come up.
For example, let’s say that you know that your server will
fail when you pass 100k users. That doesn’t mean you should pay for that
capacity on day one when you have zero users. The money could be better used
elsewhere. But when you finally reach 100k users, it’s a good problem to have.
By now, you probably have a successful business that will allow you to pay for
the added costs. However, if you’re paying for that infrastructure today,
you’re burning through precious dollars now on a hypothetical problem that
might not happen for another year or two.
Conclusion
The costs associated with software development do not end
after you launch. If you’re building an app, you must anticipate the five
hidden costs that I’ve outlined in this guide:
Maintaining your staff
Hosting expenses
Maintenance
Training
Strategic costs
Anticipating these ahead of time will ensure that you have
enough money in the budget to be successful. Otherwise, the quality of your
software will suffer. Keep my pro tips and best practices in mind as well to
help save money on software development.
I hope this guide was helpful. Use it to anticipate future
costs whenever you’re developing new technology.
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