How to Sustainably Improve Profit Margin at Your Software Development Agency
Improving your margin is an exercise in balancing costs against the tactics you are using to generate revenue while continually working to make your team more efficient.
To compete in today’s digital economy, businesses must have the ability to connect data, customers and workflows at a digital speed. This is an existential challenge that almost every business faces, and yet most are woefully unprepared to address. To combat this challenge, businesses are investing more in accelerating application development, modernizing their infrastructure, and improving their user experience. This response is commonly referred to as digital transformation.
When you think of the main difficulties in competing in the digital era, companies most often struggle with the risks associated with either purchasing SaaS products or building applications from scratch. They see their competitors doing it but are lacking time, resources and risk tolerance to move forward with risky technology decisions. In addition to this, there are many operational bottlenecks that prevent businesses from being able to keep up with demands, including reliance on thinly staffed IT departments lacking application skills. According to a recent survey by McKinsey & Company, only 8 percent of companies surveyed said their current business model would remain economically viable if their industry keeps digitizing at its current speed. Such trends elevate the need for not only technology implementation but entire business strategy transformation grounded in technology.
Low-code development introduces a new way to develop software fast and with a large reduction in the amount of hand-coding needed, enabling developers to skip time consuming tasks and get straight to building the unique capabilities of an application. With traditional development, even though there are plenty of available frameworks, APIs and open-sourced resources, we still face many obstacles when creating an application from scratch. Using these resources helps, but development cycles can still take months or years. With a low-code approach, the complexities and repetitive “plumbing” inside of applications can be abstracted, enabling builders to deploy in hours or days.
Writing code isn’t the only complex and time consuming part of software development. Technology planning and architecture, testing and deployment can be just as time-intensive, if not more. Using a low-code platform, most of these processes can be skipped or greatly reduced. Having the ability to use pre-tested capabilities and components straight out of the box allows you to skip the headaches and focus on building the core value of your product. While some people might find enjoyment learning different frameworks and repeating tedious implementations, such as user roles and permissions, a competitor using low-code tools might already have a product shipped to their customers and collecting revenue; clearly demonstrating the power of such tools in today’s modern era.
The other option for creating your business software would be to use pre-packaged SaaS solutions. In this case, these services tend to offer narrow capabilities, with integration frequently becoming an issue, as well as escalating costs. Without being a custom-built solution to meet your exact needs, businesses often change their processes to adapt to the capabilities of these platforms. In many cases, businesses require 10–20 SaaS products to meet their needs at a great recurring expense.
Ultimately, low-code platforms such as 8base aren’t seeking to minimize the roles of developers. Instead, they aim to enable developers and businesses to create solutions that people actually want. Instead of spending valuable time and resources building an app or software that is not quite the right solution or needs many iterations because technologies and times change so quickly, you can now create and deploy these same solutions much faster, giving you the ability to focus more on your customers and creating features that they need.