Software Product Development: Process, Price, Team, and Pitfalls

1765 Updated 09.29.2022
Yuriy Matviyuk

Development Tech Lead

5/5

Table of contents

Regardless of the core business problem you seek to solve through building high-quality software products, there are key milestones you come across along the way. From initial product ideation to final deployment and post-release support, your software product’s success depends on how you build this process.

In this article, we’d like to share Northell’s practical insights and best practices with companies who are seeking advice on how to do it right. Among the wide variety of software product development approaches, activities, and procedures, you must decide what works best for your unique project.

After reading this blog post, you will:

  • Understand what methods suit your goals
  • Explore core product development steps not to be missed
  • Realize how to establish the right workflow
  • Learn when, where and what you need to do to achieve the expected project outcomes

What is software product development?

Software product development can describe the process of developing a new product, upgrading an existing product, or improving the development process. The primary outcome of developing a software product is a deployed and ready-to-use software product that meets specific business and market needs. Software product development means converting an initial product idea into a functional product.

In turn, the software product development process is an iterative logical process with many short milestones required to develop a fully-functional software solution from ideation to product launch.

The primary role of the software development life cycle is to deliver a high-quality and functional product that meets software quality standards and your unique business goals. The process of creating a software product helps build high-quality software and track progress at every short iteration. From ideation to product release, SDLC enables you to understand where problems are rooted, fix them on time, and ensure that every new release rolls out successfully.

To make this process efficient and result-oriented, you must apply the best practices, methodologies, tools, and collaboration models that match your project. Also, one more challenge here is the need to choose a well-elaborated software development strategy that will meet project requirements, deadlines, and budget.

Before you learn how to do this, there are specific differences between custom software and off-the-shelf solutions you need to know to organize the product development process right.

Let’s have an in-depth look at the table below.

Custom software product development vs. ready-made: what’s the difference?

To invest wisely, let’s review the validation criteria and look at the main differences between custom software products and a ready-made solution.

Criterion Custom software Ready-made software
Functionality Open to choose a framework, custom layout, design, server, and more. In other words: full control over technologies and built-in features without sacrificing quality and user experience  Higher chance of missing software capabilities, built-in functionality with a limited feature set
Compliance with business needs Already catered to your critical and unique business needs, and project requirements Need to adapt to existing software capabilities
Cost Higher initial investment and maintenance cost, but higher return on investment (ROI) Required investment is lower, but ROI is also lower
Flexibility Fully tailored to your organization’s unique needs, fully manageable, allowing you to make adjustments and integrate other third-party solutions  User-friendly and easily accessible software but not personalized to help you run your business the way you’re used to 
Updates and support Custom software vendors can offer support teams to maintain your custom software and fix any issues when using the solution. Plus, you can update your software on demand A ready-made solution is specific to technology, with paid technical support and limited ability to upgrade as needed. Vendor updates are often unnecessary 
Perspective for business Long-term commercial prospects and business scaling opportunities Short-term business opportunities due to system versatility and lack of flexibility and scalability
Deadlines Requires more time and effort to create a unique and reliable platform Ready-made software solutions are easy to install and start using 
Integration A system can seamlessly integrate into your existing ecosystem Technical limitations often do not allow the system to meet the expected needs 
Confidentiality and data security Extensive testing and bug-fixing of a custom solution ensure flawless performance, strong system protection, and data privacy More vulnerable to cyberattacks and such platforms are often not fully tested for all bugs

For startups, we have an insightful guide to the critical aspects of custom software development you need to know to make the most out of this process.

Who needs software product development?

From the software business perspective, product development is the core company process. Often, this process requires external resource involvement and specific experts without sacrificing the deadlines and budget allocated.

Small-medium businesses (SMBs)

In the case of SMBs, several ongoing software development projects require constant attention and support. Therefore, such companies can often experience time and financial constraints. So they need to hire professional software development teams who follow a mature software product development process.

This way, SMBs can:

  • Avoid the hassle associated with team recruitment and onboarding
  • Reduce hiring costs
  • Optimize team workload
  • Acquire needed talent
  • Ensure jobs are done on time and of the required quality

Enterprise-level companies

If you have a large business, you may already have established workflows; you adhere to your software development practices; you have enough specialists to work on different projects.

A possible cause for concern is the massive pool of short-term tasks revolving around big and long-term projects. Or often, a highly specialized expert in a particular technology is required.

Thus, it is wise to delegate these tasks to remote teams without wasting internal resources. The only aspect is that the remote team’s workflow should match your style of project management and have the required team composition.

The good news is endless opportunities to hire an offshore team to meet your business needs per your expectations directly.

When do you need software product development?

When do you need software product development?

When do you need software product development?

You may have different business needs if you want to meet the market demand by developing successful software products. Let’s see what business inquiries might be a prerequisite for creating a software product and what your company can gain.

Higher profitability

There are more chances to increase company profits by successfully deploying each new feature at the end of the SDLC iteration. When done right, the software development process ensures the final product’s quality, robust functionality, and efficiency. This lead to higher business profitability and quicker return on investment.

Meeting specific business needs

You must weigh the pros and cons before purchasing off-the-shelf solutions when you want to meet a particular business need with a software product. It is often difficult to find a one-fit solution. So, if you choose to develop custom software products or solutions, you’ll be able to address exact business needs. In addition, custom software adapts flexibly to changing technology trends. Thus, custom software is well suited for businesses in the long run.

Advanced features required

Considering companies with complex projects requiring complex features is the reason to “vote” for custom software development. With custom development, you are more likely to meet ever-changing market demands and remain competitive.

Business scaling

When you need more space to scale and grow your business, software development is your tool to make it happen. However, ready-made solutions encompass only the features your business needs at the moment. To avoid overheads, choose to build custom software products. In such a way, you’ll be able to implement new features and grow your product whenever you need.

Seamless integration with an existing ecosystem

Custom software is a worthwhile solution to ensure seamless integration with the existing ecosystem. The chances of integration issues are significantly lower compared to ready-made platforms.

Enhanced reliability

Software products’ data should be highly secured with high-level security measures. Depending on the industry, you must adhere to specific standards and regulatory compliance.

For example,

  • For the fintech industry: PCI DSS (Payment Card Industry Data Security Standard) and OWASP(Open Web Application Security Project)
  • For the healthcare industry: regulatory compliance (HIPAA, PIPEDA, GDPR, and FDA)
  • ISO 27001 certification (information security management system according to international standards)

These requirements help prevent data breaches, cyber-attacks, and other security flaws. These standards also protect sensitive customer data. Besides, while creating a software product, you should ensure your team prioritizes the security level with an end-to-end framework that includes risk modeling, vulnerability, and security policies.

Where to hire product software developers?

There are many ways to find the perfect match from the huge pool of talented software developers out there. Let’s discuss them in detail.

B2B directories

Well-known platforms that you can trust to find reliable software providers are Clutch and GoodFirms. These B2B directories allow companies to explore software services provided by companies from all over the world. You can filter your search, view portfolios and testimonials from real clients, and check the quality-to-value ratio of a software service provider.

Freelance online platforms

There are many freelance online platforms where you can find a potential candidate.

For example,

  • Upwork – is a freelance website that connects software businesses and talents to collaborate on projects of all sizes
  • TopTal, Guru – is a freelance website that links businesses to their recruitment needs
  • LinkedIn – is a dedicated platform for hiring individual IT specialists and software companies where you can read reviews from real clients, evaluate portfolios and profiles of companies
  • Glassdoor – is a dedicated platform for hiring individual IT specialists and software companies where you can read anonymous reviews from the company’s customers and employees

However, there are many risks associated with proper project commitment and quality of the rendered services. Unfortunately, there are no specific mechanisms to help insure the freelance type of cooperation, unless you have a colleague’s recommendation or legal agreement.

Referrals

Searching for referrals is suitable for businesses with a vast professional network. You may know people in your industry who can recommend a particular software provider or individual IT specialist.

However, this option can also be time-consuming and risky. Moreover, if you don’t have such valuable business contacts, you may need time to make partnerships and find a suitable recommendation.

How can Northell help you in product software development?

Why choose Northell

Why choose Northell

Another direction to look for a professional software development team is Northell. Based on your product goals and business needs, we can develop a project roadmap to fit your budget and deadlines.

Thanks to our experience in developing projects for various industries, we have a well-established workflow and offer our clients a flexible cooperation model, best tools, and technologies.

Don’t miss the opportunity to get acquainted with recent projects we have worked on and the industries for which we develop software products and solutions.

  • Education (BridgeX – education mentoring tool to help aspiring entrepreneurs evaluate their business idea)
  • CRM (NWCC – a reliable provider of comprehensive construction loan management solutions)
  • FinTech (Finance Brokers – digital mortgage platform for quick and easy search of banks and financial institutions)
  • E-commerce (HelpPays – is the largest marketplace for short-term peer-to-peer loans)
  • Healthcare (CareSync is a hospital management system that automates the clinician’s operational activities and improves patient care delivery)
  • SaaS (MeetAlfred – sales enablement software for LinkedIn, Email, and Twitter)
  • Real Estate (Tailwind – IoT project for house management)

Having successfully completed over 160 projects in a couple of years, our team has been ranked as:

  1. Top Development & IT Companies in Ukraine by Clutch
  2. Top 3 Web Developers in Munich by Clutch
  3. Top 1 Software Developers in UAE by Clutch
  4. Top 10 Design Agencies by the Manifest.

Our software experts use the following technologies to build and upgrade software products:

Software development technologies

Software development technologies

So, if you need:

  • A proven track record of company success
  • High-level and seasoned specialists
  • Transparent software product development workflow
  • Efficient team management
  • Modern tech stack knowledge
  • Flexible contract types (fixed price, time and material, dedicated team)
  • Timely release of high-quality software product

Contact us to get a dedicated software development team as soon as possible.

What is the best software product development methodology?

To avoid scattering among numerous approaches and SDLC models, you’ll need thoroughly analyze the market, users and plan your software product development process right. For this purpose, it is crucial to choose the best software development methodology corresponding to your company’s style and core goals. Let’s briefly discuss the differences between the most popular models and see which projects these models are best suited for.

Agile development methodology

In response to the changing priorities of the software development industry and fluctuating market demands, software companies emphasize flexibility in the development process. Agile uses an iterative approach that allows development teams to be more resilient to changes that inevitably occur during the project.

Agile employs an iterative and incremental process. It provides short product development cycles in the form of sprints that last 1-4 weeks. The team evaluates the completed scope of work and defines new goals to deliver release-ready products at the end of each cycle.

Let’s summarize the pros and cons of Agile software development in the form of a table:

Pros Cons Projects 
  • More control over development
  • Improved team productivity
  • Transparent communication  
  • Enhanced software quality 
  • Greater customer satisfaction when the software product goes to market
  • Higher return on investment  
  • There are no specific development deadlines 
  • Time-consuming process due to long-lasting discussions customer feedback and meetings after each release
  • Short-term projects
  • Small-to-medium businesses (SMBs)
  • Enterprise-level projects 

Waterfall development methodology

Traditional Waterfall methodology entails a linear-sequential life cycle model that governs project management.

In the Waterfall environment, the development process has a strict, orderly structure. It means the team proceeds with the next task only when the previous one is done. In other words, the software development process is divided into such stages:

  1. Discovery
  2. Design
  3. Development
  4. Testing
  5. Deployment
  6. Maintenance

The pros and cons of Waterfall software development and the projects this model works best:

Pros Cons Projects 
  • Linear sequences
  • Close project management involvement 
  • Upfront planning 
  • Focus on detailed documentation
  • Easy to estimate the budget 
  • Less customer involvement 
  • Requirements formulation is needed
  • Testing part is performed at the end of product development that makes it harder to spot all bugs timely and leads to increased costs
  • Doesn’t work for complex projects 
  • Failure to monitor compliance with customer expectations
  • Small projects with ready structure
  • Low budget projects  
  • SMBs without the need to scale

Scrum methodology

Scrum methodology is an Agile-adapted methodology distinguished by special flexibility. This model implies an iterative approach to project management with direct customer involvement. The work splits into sprints, where the project and delivery managers describe goals, assign tasks to the team, and set deadlines.

After each sprint, the team reviews completed tasks, identifies blockers, and conducts Q&A sessions. The main goal is to control the team and tightly involve the customer in the process.

The pros and cons of Scrum methodology and the projects that this model works best:

Pros Cons Projects 
  • Flexible development 
  • Daily team meetings
  • Full client involvement 
  • Client micromanagement is often required
  • Unsuitable for undisciplined employees
  • The daily contribution of a team member is needed
  • Medium to large size project (from 4 months to multiple years)

Mixed product development methodology

At Northell, we can offer our customers mixed product development methodologies. For example, we can work with a mix of Scrum and Agile software development methodologies, dividing the project’s scope of work into sprints that last two weeks. This usually works best for small projects with tight deadlines and without project planning.

The pros and cons of mixed product development methodology and the projects that this model works best:

Pros Cons Projects 
  • Flexible development 
  • Fast and easy management 
  • Little or no planning 
  • Fast adaptation of new developers and employees 
  • Clear results are guaranteed 
  • Small projects

As you can conclude, the choice of a particular software development methodology can be mixed upon request and depend on various aspects: your basic needs, project size, preferred management style, etc.

Tasks you need to do before initiating software product development

Before you decide to start planning your product development process, you need to complete a number of tasks to ensure an efficient and result-oriented approach.

Consider a collaboration model for your project

Northell offers customers two collaboration models: product development outsourcing and IT staff augmentation.

Staff augmentation is a form of outsourcing model that allows you to maximize the efficiency of your in-house team. In other words, you invite your outsourcing vendor’s software team for how long you need to develop a solution or product. The primary responsibility is placed on the customer. It means you assign a manager from your in-house or remote team to manage the workflows and the overall development process.

Product development outsourcing is a project-based development approach where the primary responsibility is placed on your outsourcing provider. The outsourcing vendor is responsible for product development and management from initial ideation to final product launch.

There are also pricing contacts for software development outsourcing: time and materials, fixed price, and a dedicated software development team.

Depending on the requirements of your specific project, you should decide on the collaboration model that will work best to achieve product success.

Choose your development approach

As we mentioned earlier, choosing the development methodology will sketch the specifics of your process. In this way, you will outline key aspects of your project:

  • Project duration
  • Project scope
  • Involvement in the development process
  • Payment model
  • Work schedule

Select collaboration software tools

It would help if you decided on collaboration software tools to successfully manage the development team and guide the overall product development. With the help of online tools, you’ll be able to monitor the process and understand the current development agenda at any time. Examples of such tools are:

  • Project management tool (Jira, Trello)
  • Task management tool (ClickUp)
  • Digital visualization tool (Figma, Moqups, InVision)
  • Communication tools (Slack, Skype, Google Hangouts)
  • Developer tools (GitHub, Bitbucket)

Clarify roles and responsibilities, and form a team

The project’s team set is a list of experts needed to complete the tasks associated with product development. Depending on your project specifics, the team structure may rotate. Typically, to develop a product from scratch, there is a need for such specialists:

  • Project manager
  • Business analyst
  • UX/UI designers
  • Backend developer
  • Frontend developer
  • QA specialist
  • DevOps

However, depending on the project you’re working on – other specialists and roles may be required. During project planning, you’ll be able to understand what specialists you need.

Software product development process: 7 key steps

Software product development process: 7 key steps

Software product development process: 7 key steps

Proper organization of the software development process is the root cause of effective teamwork and successful product releases. After we’ve discussed all the essential nuances and definitions, let’s visualize and describe how this process works in practice.

Step 1. Initial discovery & research

By getting started with an initial product idea, software development teams can slightly understand the essence of the future software product. To get an overall product’s perception in terms of technical, economic, and operational feasibility, the teams organize brainstorming sessions and perform initial discovery and research.

This stage helps create the project’s roadmap, validate the market idea, and formalize the technical requirements for the product. Before embarking on the journey of creating a software product, we can highlight the key activities and results that you must achieve at the end of each stage:

Main activities Key deliverables 
  • Consult with business analysts, system architects, customers, and project managers to identify loopholes in documents and answer questions that may arise during requirements gathering
  • Conduct market research and research competitors 
  • Define project priorities and focus
  • Product development roadmap

Step 2. Project planning & stakeholder workshops

The project plan and strategy should outline every detail essential to software product development. During this step, project managers assess all development efforts, costs, timelines, and the total resources for the project. After that, the team analyzes the business and tech aspects to form a single project plan that covers key project milestones and deadlines.

Main activities Key deliverables 
  • Conduct stakeholder workshop to finalize product requirements 
  • Conduct product, design, and engineering workshop
  • Create a project plan that includes detailed product description
  • Establish a communications plan and team structure
  • Set tech requirements 
  • Determine the right tech stack 
  • Consider project timing and budgeting 
  • Detailed product and software requirements specifications (SRS)
  • Clear project management plan

Step 3. Product architecture design, wireframing, and prototyping

Home 2

Northell Case Study – NWCC

Once the project plan is ready, it’s time to design and develop the product flow and functionality. Prototyping wireframes is essential to set users’ interactions with the product. It can also help get user feedback early on and test first design mockups. UX/UI step is the core milestone ensuring a smooth and user-friendly experience and seamless interaction with developers. Skipping it can affect your final product’s quality and value.

Main activities Key deliverables 
  • Create user flow and wireframes 
  • Create a unique product design system that describes the requirements for style and all elements, which will allow developers to implement the product design correctly
  • Product wireframes and mockups
  • User’s flow and stories 
  • High-fidelity prototypes
  • Tech architecture   

Step 4. Product development

During this step, developers begin writing code complying with product and SRS documentation. Depending on the type of methodology and defined scope of work, developers implement features step by step.

At Northell, we adhere to Agile or mixed software product development to ensure timely risk mitigation and requirements compliance.

Main activities Key deliverables 
  • Product features’ implementation
  • Regular team meetings to fine-tune the product 
  • Code and QA peer review 
  • Delivery presentations 
  • Alpha and beta versions of the ready-to-use product 

Step 5. Testing

The testing part is integral to the software product development process to ensure a flawless and high-quality experience before the product goes public. The sooner errors are identified, the easier and cheaper it will be to fix them. It’s better to apply both manual and automated testing to ensure high product quality and eliminate as many risks as possible.

Main activities Key deliverables 
  • Testing software functionality 
  • Users’ acceptance testing 
  • Testing seamless system integration 
  • Testing platform compatibility with other software and hardware 
  • Testing product’s security and performance  
  • Fully-functional software product

Step 6. Deployment

We adhere to the gradual deployment process to deploy the system sequentially to avoid incorrect system operation. In this way, your team will collect early user feedback, understand possible product vulnerabilities and rework them until the product is fully integrated.

The Northell team deploys the final solution to production and performs a series of tasks to make sure the product is ready for use by end users.

Main activities Key deliverables 
  • Deploy the product step by step to production environments  
  • Fully integrated product ready to collect positive user feedback 

Step 7. Maintenance

The final stage of the software development process entails regular software product upgrades. The main goal of this stage is to maintain the product’s robust functionality, fix problems that arise, improve performance, and similar.

The Northell team offers post-release support to our customers to foster the product’s successful results, satisfy users and drive innovation.

Main activities Key deliverables 
  • Software product updates per request
  • Bug fixing  
  • A competitive and high-quality software product that fully meets the expectations of the customer and users

Go through all steps of the software development process with Northell’s professionals. Just share your product idea, and we’ll take care of the rest.

Bonus: software product development challenges and Northell’s solutions

Let’s review the most common mistakes you may encounter when developing a software product and look at workable solutions for each case.

Wrong choice of technology

Problem: Wrong technology choice is a misstep causing project overtime and budget overheads. Chasing after brand-new technologies without specific experience using them increases the risks of unsuccessful product deployment.

Solution: To select the best technology suitable to unique product requirements, it’s best to:

  • Identify the users’ pain points and problems you’re going to solve while creating a software product
  • Assess the product’s functionality required
  • Check the developers’ experience using them
  • Hire professional experts to help you save your time and efforts in advance

Lack of focus on UX/UI

Problem: As we already mentioned, the UX/UI stage is critical before implementation. Without product design solutions, you risk getting a poor user experience and product malfunctions.

Solution: To avoid losing a good company’s reputation, ensure you’ve invested enough time and conduct design workshops to fulfill the product’s needs.

Software developers and engineers shortage

Problem: Despite your company’s size, you may lack sufficient resources to take up operational and development tasks. The reasons are: high salaries, onshore talent shortage, and lack of time and finances for long-term onboarding and recruiting.

Solution: Don’t hesitate to outsource the software development team worldwide. Many Eastern Europe countries offer various end-to-end services, skillful teams, transparent project management workflows, and more. Are you interested to know the details? Find helpful information in our recent blog post on Eastern Europe software development outsourcing.

Long release cycle

Problem: Long release cycles can indicate an inefficient project management approach, the wrong team, development approach, or the wrong product focus. This can lead to a long time to market and an unpredictable software development process.

Solution: Ensure you’ve picked the suitable software product development methodology and thoroughly plan your product roadmap. Otherwise, reread our software development process and ask us any questions.

Team management blunders

Problem: Team management is a difficult task for specialists without relevant experience. A manager should track the developers’ work, ensuring the proper activity and the absence of blockers. If you don’t have an appropriate communications plan in place and the development team isn’t delivering what you expect, fix it.

Solution: Agile and Scrum development methodologies are reasonable solutions to detect any bottlenecks and eliminate them timely. In this way, you’ll be able to track the team’s success and deliver expected results.

Software product development cost

The cost of creating a software product depends on many factors:

  • Business model
  • Features package
  • Expected time to market
  • Development approach
  • Team location
  • Team size
  • Team expertise
  • Hiring model

However, we’ve prepared a comparison table to help you understand the costs for software product development divided by the outsourcing region and project stage.

Rough project costs

Rough project costs

Rough project timelines.

Below you can also see Northell’s timeline calculations based on project size and stage.

Our work estimate

Our work estimate

Regardless of your business request, you can always ask our sales managers to do this work for you. Share with us your project needs, and we will contact you as soon as possible.

Software product development: Conclusion

The key aspects and nгances highlighted above are a quick demo you need to learn before jumping into software product development. Getting real value from investing in software development is possible through efficient workflow organization, tracking, and management.

With the help of a talented team, you will be able to maximize the desired outcome while minimizing the risks of product failure.

The Northell team has a mature product development workflow, multiple collaboration models, and knowledge of the best technologies used to develop a variety of software products. Contact us to benefit from our team firsthand!

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