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

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 strong-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:

• Decide exactly what you’re building. Is it a pet hotel tracking system? Is it a food delivery app? Is it a live IOT tracking system? Or are you improving existing systems? Be specific - as this helps you map out features.
• Decide who you’re building software for. Is it an internal tool or a piece of software or SaaS you want to sell to other businesses? Is it a customer-facing product and if so, who are your target customers? When mapping out your customer base, think of their age, occupation, location, lifestyle, budget, and general needs.
• Ask yourself, what needs should this piece of software fulfill? The best way to map out an app’s features is by deciding what specific needs you want it to fulfill. Is it placing food orders? Is it giving your company’s employees a way to speed up their work? Is it helping other businesses manage their inventory and orders?
• List specific goals you want to achieve through the app. We’ve talked about the what, now we need to talk about the why. List SMART goals by including numbers, percentages, specific users/customers, and a deadline. For instance, “Our business should sell 20% more subscriptions in the 6 months following the app release”. This ensures long-term success.
• Create a detailed software project roadmap. Put all of this together in a software project roadmap that details your goals, intended audience, specific features, project timeline, resources needed and maintenance & continuous development you’ll do.

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:

• Hold focus groups. Gather 5-6 random people that fit your target audience and ask them about their needs, habits, and day to day life. Introduce your app idea and ask them for opinions, as well as suggestions and complaints.
• Send out surveys. Survey target audience members on their needs related to your software, as well as their day to day life. Encourage them to leave longer answers, so don’t make the entire thing multiple choice. This can help you gain useful insights.
• Interview them. Hold short, recorded interviews (can be Google Meet or Zoom meetings) on the same topics mentioned above. Such 1:1 conversations can get you lots of insights, but it takes longer as you need to hold multiple conversations with different people.
• Study their opinions online. If your audience is a very specific group of people and you can find forums or subreddits where they gather, take a look at their most common discussions. You can find out pain points, preferences, and specific needs you can fulfill using your software.

Since good software is user-centric, don’t just ask questions for the sake of asking. Truly listen to your users’ concerns, ask follow-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 SaaS 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:

• Making your team’s process more efficient. If your team members struggle with repetitive tasks that can be automated, you can invest in a piece of internal software. This will speed up your process and allow you to focus on more pressing tasks.
• Reaching a new target audience, or a new segment of your current one. When you feel like your existing software or overall business is staggering, sometimes reaching a new audience with a different series of needs can make a major difference. Just how many online stores started to offer delivery to pick up points, reaching people who aren’t home all day and wish to go get their orders when they’re actually physically able to.
• Increasing profits. Let’s be honest - no business wants less profits. When in trouble, you might feel the need to take the plunge and invest in new features or a whole app, hoping to increase profits. Adding subscription services or new paid features are great ways to start.
• Tailor your tech infrastructure for scalability and security. Software investments don’t have to be purely commercial. You can also invest in improving your existing infrastructure and cybersecurity, just like how you’d get a fancy insurance package for your car, to streamline your business process. This way, you’re defending yourself against potential attacks.
• Observe the way people use your software, to improve user experience. You can invest in complex analytics systems. With these, you can watch the way people use your software and find what’s lacking. After that, you can leverage that information to improve your app.

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:

• Your team
• Your customers
• Other businesses

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 design-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 tailor-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 customer-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:

• Sales volume
• Subscriptions sold
• Churn rate
• Sign ups (for accounts, newsletters, and such)
• Employee productivity
• Brand recognition
• Customer satisfaction

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:

• Talk to your users and find pain points no other apps fix. This helps you break into new markets as you’re offering new solutions others haven’t thought of.
• Use emerging technologies. Leverage LLMs and AI tools in order to build software that fixes real, pressing issues.
• Study your competitors and industry. Look at similar businesses and find out what they might be doing wrong or lacking in. Study the state of your industry - are customers happy? Do they constantly complain about anything?
• Get creative. Innovation often comes from channeling your creativity. Take a long walk in nature, brainstorm with your team, do sketches - whatever helps you get inspired.

Creative, innovative ideas are much more likely to render success compared to rehashing existing concepts. This doesn’t only apply to customer-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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