5 Must-know strategies to ensure your software investments drive business growth Bucharest

5 Must-know strategies to ensure your software investments drive business growth
Bucureşti
Bucharest, Romania

Investing in software development for your business isn’t easy, and it can feel daunting. You’re placing a lot of money onto a process that can take many years to show any results, and you can’t know for sure if investing in software will work.

Whether you’re building a new piece of software from scratch, adding onto existing software or creating an internal piece of software, such investments, if done right, can help you scale up and grow your business.

It’s all about being smart: setting realistic, detailed goals, planning out the entire process step by step, assigning the right amount of resources, and having a
- willed team.

So in this article, we’re going to talk about specific strategies to follow to ensure investing in software development drives business growth.

Strategy 1: know what you’re building and why

You can’t possibly make a good software inv estment if you don’t even know what you’re investing in, and why. The root of bad investments is starting with a faint idea - you think this might help, but you don’t really know who it’s for, just that it’s going to make money. But will it?

A big part of building software is knowing exactly what you’re building and what business needs you have. The less details you map out at the beginning, the more trouble you’ll run into down the road - and the longer it’ll take to release your software.  

Suddenly, you’ll realize no feature makes sense, user flows don’t go together, the first few customers are unhappy, you discover features you need that you didn’t think of in the product discovery stage, or you’ve changed your mind so many times you’ve invested more than you intended.  

Here’s how to successfully map out a software project:

Another great way to begin mapping out a software project is by doing the mom test. To know if your software investment will actually drive business growth, it’s best to test out your ideas with someone who isn’t emotionally invested.

So before investing in software, test your ideas with potential customers - hold focus groups, interviews and surveys. Avoid asking business partners, friends or relatives, as the name “mom test” implies. They’re more likely to sugar coat and encourage you as a way to be empathetic and supportive. Instead, you need the harsh truth.

The key takeaway from this strategy is creating a solid base for your software project before jumping into any major investments. In order to grow your business through software, you need to map it out carefully so it aligns with your business goals, your audience’s needs and the state of your industry.

Strategy 2: talk to your target audience

Your software is bound to serve a specific group of people. Maybe it’s college students, people looking to speed up their tasks, people passionate about health, teachers, even web developers. Or maybe it’s your own team or businesses similar to yours.

Mapping out a very specific audience helps you create user flows, functionalities, and even branding & marketing materials. You’ll have a clear direction about who you need to build software for.

But just knowing who your target audience is is not enough. Your software will serve this audience, and thus, you need to know what they need and how you could integrate your software into their day to day lives.

Here’s how to talk to your target audience:

Since good software is
- centric, don’t just ask questions for the sake of asking. Truly listen to your users’ concerns, ask
- up questions, and take note of their feedback.

Once you find out more about your users, their day to day life, and their needs, you can map out better user flows and figure out how to integrate your software into their schedule.

Strategy 3: make sure your software investment aligns with your business goals

A software investment can’t possibly drive business growth if it does nothing for your business. Building a piece of software that doesn’t even fit your business and industry, adding features that go against what you stand for, or launching a Saa
S that’s overly ambitious by being too complex is specialized, you name it. There are many ways your software investments can fail.

A good way to begin a software investment is to set very specific business goals the investment should fulfill. You shouldn’t build software just for the sake of it, just to add something to app stores or your industry.

Here are some general business goals a software investment can align with:

Of course, this is all relative and depends on your business type, industry, budget, time & human resources. Everyone’s business goals are different, but if you plan on investing in software, you must sit down and carefully outline what goals you want to achieve.

Overall, investing in software can benefit:

Picking one of these is crucial, as it sets a foundation for what your project will be and why you’re doing it in the first place.

Strategy 4: carefully calculate ROIs and track KPIs

With any kind of big business endeavor, it’s crucial to carefully calculate whether or not you’ll get a return on your investment, and how much. This helps you determine if investing in software is even worth it in the first place.

Just like any investment, the more you earn from it, the more determined you should feel to jump into it. So the big question that remains is, is the software investment you want to make worth it?

Now, ROI has the same formula regardless of industry, but we’re going to dive into the specifics of what you need to know in order to calculate it.

Just as a refresher, here is how you calculate the ROI of any business project:

ROI = (Net Benefits / Total Cost) * 100

Define costs

Let’s start with the I part of ROI. In order to calculate your ROI, you need to know how much you’re actually investing. In the case of building software, there are several costs you need to consider.

Development Costs: 

This refers to all expenses related to the project's design, development, and implementation. If your software partners build
- first, you’ll get a more accurate estimate for the development costs.

Hardware Costs: 

If the software requires new hardware, factor in those costs. Maybe you’re building a piece of software so complex your team’s computers will need to be upgraded to run it.

Implementation Costs: 

Consider data migration, process changes, and the cost of switching to the new system. This is especially important when adding on top of existing software, such as redesigns or new features.

Training Costs:

Account for the expense of training users on the new software. This can apply either to customers or your own employees, if you’re building a tool to use internally.

Maintenance Costs: 

Factor in yearly operational costs, maintenance, licensing, bug fixes, technology upgrades, and anything else you might need over time. If you’re going to hire another team to do this, factor in the time it takes for them to get familiar with your software (it might be a better idea to stick with who built it in the first place).

Define benefits

Now we gotta look at the R part of ROI. What can you get in return? New customers? Time saved by your team through
- made software solutions? Increased profits? Sit down and look at all the things you can get out of a custom software development project.

Quantifiable Benefits:

Determine the savings and profits the software is expected to generate, which may include increased revenue, reduced operational costs, or improved efficiency. This is especially important when building internal software, as you’re trying to save human & financial resources through new software.

Qualitative Benefits:

Assess less tangible benefits, such as improved customer experience, better data analysis capabilities, or increased regulatory compliance. You can try to assign monetary value to these by estimating their impact on retention, sales, or other metrics. New features can attract new customers and keep existing customers longer, by improving user experience.

Return on Time Saved: 

Calculate the value of time saved by users due to the new software. This applies both to internal and
- facing software. After all, time is money, no matter who’s time it is.

Outline and track KPIs

Once you’ve got a better understanding of whether or not your investment is worth it, you need to outline a series of KPIs (key performance indicators) so you can accurately evaluate if you’re actually earning money & achieving your goals.

Software project KPIs can be:

Pick which KPIs matter to you and return to them once the project is complete. Measure them before and after the project launch. It’s the best way to measure your project’s success and determine if your initial investment was worth it.

Strategy 5: innovate and pioneer

Alright, let’s say you know you want to build a piece of software, you want to invest in it, you’re doing roadmaps, calculating ROIs and setting up KPIs, but is that truly enough to drive business growth?

Just planning it right won’t guarantee success. What does is innovation, software that fixes real problems nothing else fixes. Software that improves a group of people’s day to day life in ways no other apps can.

Once you come up with something unique and market it properly, you have a better shot at growing your business and disrupting your industry.

Here are ways you can innovate in software:

Creative, innovative ideas are much more likely to render success compared to rehashing existing concepts. This doesn’t only apply to
- facing products, but internal software as well. Finding innovative ways to improve workflows can be helpful to both you and similar businesses out there.

Overall, whether or not your software investments drive business growth depends on your creativity, the state of your industry, your ability to innovate & pioneer, as well as your financial, human and time resources.

Looking to invest in your own software? Let’s chat and build something awesome together.

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