How to optimise costs in IT projects without compromising quality?

Thibault Querel – Currently Senior Business Manager and Head of Associates at ITDS where he’s been working for the last 6 years. He discovered a passion for IT and programming and decided to share his passion with all new recruits, as he believes strongly that understanding exactly what his clients need and what his consultants do, is the best way to make sure both parties will find a perfect fit.

IT project management is often challenging in terms of budget. Although the costs of such projects are usually high, there are a few simple solutions that can help reduce them significantly. In this article, I will explain what you can do to optimise the costs of your IT projects effectively!

IT cost optimisation – things to consider before launching a project

With IT projects, a large portion of spending covers the specialists’ salaries. Bear in mind, however, that the team includes more than just programmers – you also have Sales Reps, Analysts, Project Managers (such as the Scrum Master or Agile Coach) or UX designers. Before you start preparing a budget, draw up a detailed plan including all the people that will be involved in the project.

Not every enterprise or organisation has its own IT team. And even if there is one, it is often necessary to hire additional people. This does not mean, however, that you need to provide them with permanent employment contracts. Many companies cannot afford that – programmers have high expectations regarding their pay and employment conditions. The most reasonable thing to do is to outsource IT recruitment to an external company specialised in sourcing IT talent, or to use the services of freelancers. 

How to reduce the costs of an IT project?

It is possible to optimise the costs of an IT project when you analyse all the spending at every stage and keep in touch with the team at all times. It is essential to organise work well and set priorities. Unexpected costs usually arise because of mistakes, misunderstandings, and other faults which then need to be corrected; this can also generate delays.

What are the key issues in IT project management? What are the foundations for accomplishing a task in the most profitable way?

Choose top IT specialists – and only the necessary ones

With IT projects, experience is key. It is much easier to work with a team of people who have already tackled similar tasks. Therefore, the most reasonable thing to do is to start out by hiring people who already have experience in developing the relevant software/apps/systems, or who have been involved in similar IT projects. But make sure that you only hire people that are actually necessary for a given project.

Sometimes a few roles may be fulfilled by one specialist, as depending on the nature of the project, not every team member may be required.  For example, when developing an advanced business application for data analysis, the role of the Project Manager as well as Business Analyst can be taken on by someone qualified and experienced both in managing the work of a team and implementing subsequent project stages, and in analytics. Hiring someone with the necessary competencies for both of those roles may help you use your project budget more efficiently. 

Use the relevant project management methodology

By choosing the right project management methodology that matches your specific needs you can significantly streamline all the processes while also limiting the related costs. At the very beginning, the Project Manager should decide which methodology is best suited to the project at hand.

Agile methods such as Scrum are very popular. They involve implementing smaller tasks in iterations (incrementally), with constant monitoring. This approach, however, requires frequent meetings. Monitoring progress on a regular basis is excellent for a longer-term project but when a process is less work-intensive this may constitute unnecessary effort or burden.

Productivity and process management are the most important. With shorter-term projects it is often better to use the Waterfall method, a cascading work model in which tasks are implemented in a pre-set order.

Ensure good communication and information sharing

Projects can only be managed efficiently when everyone involved can communicate easily and quickly. However, companies often make the mistake of getting too many tools and people involved, with the original intention being to improve the exchange of information. It is worth having a look at the structure and trying to simplify it as much as possible – in most cases, direct communication works best as it reduces the risk of misunderstandings and shortens the time necessary to move on to the next stage of the project.

Detect and eliminate unnecessary spending

Optimising project costs also involves looking for savings. It may turn out that some software or IT tool that used to be helpful is no longer necessary and you can cancel the related subscription. It is also good to plan meetings properly – they are very important in project management but should only be held when actually necessary. Otherwise the team wastes their time and loses on performance.

Obviously, you need to be sensible when seeking savings. Often it pays off to invest in additional specialist consultant support instead of looking for the right solution on your own.

Agree on the optimum way of settling payments with the contractor

The process of preparing the contract itself can also be largely responsible for generating spending. When embarking on advanced IT projects with external specialists, what you need first and foremost is to decide how you are going to pay those people for their work.

One popular solution is to use a contract focused on short project stages. This makes it easier to handle the formalities and  also allows for evaluating the outcomes better and potentially updating the guidelines or requirements. It also ensures some sort of security – if there are too many problems or the contractor is unable to perform the task, you can part ways with them sooner and limit your financial losses (or damage to your image!). Cost optimisation should also take into account such situations as they are the most significant causes of large unexpected spending.

Why is it worth using IT outsourcing for your projects?

The outsourcing of IT engineers is one of the best ways to optimise costs when implementing an IT project. It relieves you of the necessity to run the recruitment processes yourself to hire specialists with the right qualifications, which is a fast, convenient and safe solution. What other benefits are worth taking into account when considering the outsourcing of IT engineers? 

Access to expertise

IT outsourcing companies have significant experience and expertise in many fields of IT, which allows them to provide quality services and solutions adapted to the needs of the company.

Greater flexibility

Outsourcing may ensure flexibility in project and resource management. IT providers may offer dedicated resources to work on specific projects, which allows for scaling up or down as necessary.

Better risk management

Outsourcing in IT may also be helpful in risk management, as the providers are often experts in tackling potential problems and mitigating risks. They can also ensure additional support and guidelines throughout the project life cycle, thereby ensuring that it is finished on time and on budget.

Focusing on core business

The outsourcing of IT engineers allows companies to focus on their core business instead of allocating resources to IT-related tasks. For example, a company may outsource its IT function to an external provider – this way it frees up its internal resources and then allows to allocate them to product development or customer service.

Flexibility and scalability

The outsourcing of IT engineers gives companies flexibility and scalability by allowing them to quickly adjust their IT resources to the changing business needs. 

By cooperating with companies that offer support in assembling the project team, such as ITDS, you can maximise your chance of success while keeping costs to a minimum. You can then speed up product development, meet clients’ expectations, and make sure that your company has a good IT structure in place. It simply pays off to trust specialists.