From startups to enterprises, SaaS (Software as a Service) has become the go-to option for new software product development. The largest cost component of establishing a SaaS company or a product is the product development costs. This includes the conceptualization, design, development, go-live, enhancement and maintenance of the SaaS application. 

Often, SaaS company founders are not aware of steps, tools, and checkpoints they should follow while building their product. This can lead to overspending early on that may make it difficult to achieve profitability and help your business grow effectively.

So how can one optimize SaaS development costs?

With proper awareness about the SaaS product development process, startups can manage costs better. Here are few practices to optimize product development and remove unnecessary startup expenses.

1. Create a detailed requirement document

Requirement analysis is one of the earliest and most important stages of software development. A requirement document defines the software system’s purpose. Start with a summary and then elaborate on functionality, interface, the scope of the product, and performance criteria. Use references and representations wherever possible, such as screenshots, competitor links to helps communicate your needs to your software development team. 

A detailed requirement analysis and scope definition tend to improve quality planning and thereby reducing the cost and duration of a project. Incomplete requirement analysis can affect project schedules, lead to higher costs, and result in poorer quality SaaS product.

Most SaaS startups want to launch with most features because of the belief that it will help them increase the adoption. However, some features cost more to build and don’t guarantee a profitable outcome. It is important to identify and eliminate all unnecessary features during the requirement analysis. It helps refine your scope to better utilize resources that efficiently build useful functionalities. 

2. Design prototypes first

A major mistake many SaaS company founders make is rushing the UI/UX of the product. The usability of your product can define your success. The UX design should be easy to use, and intuitive to navigate without affecting the performance. 

Less money spent on design can push those expenses into the development phase, potentially lengthening development time and build costs. It may also increase the churn rate of your customers, who sign up only to realize the product is not what they’re expecting. 

To save on design costs it’s important to efficiently do your wireframes and visual design first before you go into development. This helps you to see the user experience before you develop the product. If you develop with a half-baked design, you will end up spending more time and money while releasing a less-than-ideal experience.

3. Use MVP product development

MVP (Minimum Viable Product) refers to creating a product with core features and offering it to a specific audience to get feedback. It is an ideal and highly recommended strategy to reduce costs and validate if there is demand for your product or service. For eg: You can start by launching an Android app first and then move on to iOS.

4. Outsource to SaaS product specialists

As a SaaS startup, you would be better off outsourcing modules of your project. You can build a remote team of dedicated IT teams and save on full-time employee and infrastructure expenses. 

In the initial few years of your product development, it’s better to outsource to SaaS product specialists. Outsourcing to a company allows you to get access to various skill sets and domain experts. A diversified team can bring a lot of value in terms of skills, experience, and know how.

Another benefit of outsourcing is that it offers the flexibility of bringing in extra staff when it’s needed for the project and releasing them once the requirement is met.

5. Communication

Effective communication with the development team is very important for successful, on-time, and cost-effective completion of your software product. Regular interactions with the product development team increase the scope clarity, minimizes the gaps, time delays, bugs—which in turn will keep your costs in control.

You should maintain a project management tool like Jira, Trello or any other project management tool. A project management tool simplifies tracking deliverables, timeline, team member updates, project documents.

6. Using cloud technology

SaaS companies require servers and other networking infrastructure to run the applications. You can reduce your initial cost by using cloud infrastructure like AWS, Google Cloud, Azure as these platforms charge based upon the usage. With cloud servers, the setup and maintenance costs become manageable.

Familiarize yourself with software development process:

Building and designing software products is a process. If you follow the right process and tips, you can build better products faster and at the right cost. SaaS startups should educate themselves about software product development since it is a big part of investment and product is what drives the monetization. We hope these tips will help you to keep your product development cost in control.


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