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Performance vs Cost: What is the cost of performance?

Funambulism (tight rope walking) is no fun, but developers today must walk a tightrope between cost and performance when building software. Earlier, the roles were clearly defined. Developers cared about performance, while associated costs were handled by finance or business. Technical teams worked towards delivering high-quality applications with little to no thought over the cost. It was understood that performance is directly proportionate to cost. The more money you spend while developing apps, the better the outcome quality. However, with ever-increasing development costs and market competition, organizations are keen to optimize the performance cost. They are now seeking cost-saving opportunities through FinOps without compromising on application quality.

Ideal systems balance cost and performance

Instead of seeing performance and cost from two different lenses, companies must consider cost as another metric to track as a part of the development process. Project budgets are often overrun when resources and time are wasted due to mistakes, mismanagement, or sheer oversight. In essence, inefficient software causes frustrating user experiences and costs more.

It only emphasizes that you must track performance and cost together to enhance customer satisfaction and save money.

Let’s understand all the costs involved in building high-performing software.

Cost of Performance in Software Development

Hardware Costs

Every software development begins with servers, network equipment, infrastructure, and storage investments. Additionally, the costs involved for the maintenance, such as electricity, cooling system, eventual repairs, and rework, can also be considered hardware costs. In a few cases, the teams will also need some specialized hardware equipment.

Software Costs

Licensing or subscription fees for various components like operating systems, performance monitoring tools, cloud platforms, and other technologies are reported under software costs. It will also include maintenance and upgrade charges.

People Costs

Building a robust application requires expertise across development, IT, and engineering departments. You will have to bear the cost of hiring across roles like developers, system administrators, performance engineers, and specialist IT operators. In addition to their salaries and other work-related expenses, training costs and certifications will also fall under this category.

Process Costs

Once you have everything else set up regarding software, hardware, and other resources, you must assemble processes and define workflows for data collection, analysis, and reporting. For this, you will require third-party automation tools for troubleshooting and debugging. All the expenses that go for process setup are classified as process costs.

Lost Productivity Costs

Anytime your system crashes, has internet connectivity issues, or experiences server downtime, it affects software performance and employee productivity, impacting overall revenue. The loss or additional costs should also be considered when assessing the total performance cost.

Best Practices to Optimize Cost Without Affecting Performance

In an ideal world – or real one, for that matter, organizations mustn’t be forced to choose between performance and cost in an ideal world- or a real one. As much as it is important to prioritize performance, enterprises must strategize and optimize their spending for balanced results. Teams can follow the below listed best practices to optimize the cost spent on software performance:

Focus on Performance from Early Development Phases

When your team begins writing code or building infrastructure for workloads, efficiency and accuracy are essential. If the team makes shoddy mistakes initially, it will lead to expensive modifications and reworks in the later stages of SDLC. Focusing on precision from day one will help you achieve better software design and implementation, saving additional costs.

Identify Bottlenecks to Streamline Process

The process flows you establish are often plagued with bottlenecks that slow the development process. Issues like resource provisioning delays, stakeholder approval blockages, and so on. These can slow down employee productivity, adding to the avoidable operational costs. You can eliminate these roadblocks through automation solutions that help you monitor and track the performance characteristics of your application.

Use Cloud-Based Solutions for Development

Moving from on-prem to a cloud platform can boost your cost savings significantly. First, cloud-based solutions are much better at handling infrastructure and optimizing resource utilization. Unlike in physical infrastructure, you don’t have to make significant investments or hire a specialized team to manage it. Cloud service providers give scalable functionalities and affordable subscription plans.

Automating Performance Monitoring and Alerting

Automating monitoring and tracking performance metrics will help you resolve problems quickly through proactive detection and troubleshooting. It will reduce the time your resources spend on finding, prioritizing, reporting, and resolving them. Automation tools will take care of the entire process, while your teams can focus on critical tasks. Additionally, these solutions will reduce service disruptions and downtime, saving the associated costs.

Calculating ROI of Performance Spending

Every effort, resource, and cost you invest to improve your software performance must be accounted for to understand its value. When you compare costs vs performance, you will get a clear picture of the value your efforts could generate. It could be in revenue generated, user satisfaction, and developer experience. Ultimately,  your performance improvement efforts must reduce costs in some way.

Not Performance vs Cost, But Performance with Cost

Organizations today need an optimal balance between performance and cost depending on their specific business objectives. However, it is unrealistic to compromise on performance to reduce costs. Instead, the idea should be to optimize the cost while prioritizing performance. Enterprises must aim to maximize their financial investment by identifying and fixing issues, bottlenecks, and loopholes that are leaking money. With automation solutions, organizations can generate necessary insights and analytics to carefully weigh the benefits of improved performance against the associated costs and make data-driven decisions.


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