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Powerful Cost-Benefit Analysis For Software Development

  • May 10, 2022
  • Updated on: August 14, 2023


Today’s marketplace remains captivated by key catchphrases or buzzwords that focus on different aspects of increasing efficiency or results. While some such phrases may be passing fads, others are the cornerstones of successful business practices and the companies that adopt them are the ones that will stand the test of time.
Cost-benefit analysis is one such concept that should be considered a critical component of the software development process. With an average failure rate of 20%, software projects are at a high risk for costing more money than they generate. Performing a thorough analysis of a project’s costs and expected benefits or outcomes is the only way to identify whether or not a given project will be profitable—and therefore viable—for your company.


A focus on quality products is a great asset to any business. However, without the ability to generate profits, the quality of your product offering has little value. If you cannot afford to stay in business because your development time and costs outweigh the amount of revenue earned from sales, your attention to detail and strong commitment to user needs will be lost. There are three primary benefits that smart businesses can enjoy from a cost-benefit analysis:

  • Loss prevention 
    When you can clearly see the costs that go into your software program and balance those with the sales profits, you will be able to prevent pouring more money into a product than you get out of it.
  • Increased profits 
    Preventing a loss is important but it is in the generation of profits that your business can really succeed. A cost-benefit analysis can help to illustrate ways that your company can increase software sales, revenue and ultimately profits.
  • Improved decision making
    Every part of the software development process offers opportunities to streamline operations, reduce costs, or improve performance if the right information is made available. Having data readily accessible can help management and development teams make the right decisions at the right times.

Implementing a comprehensive system of cost-benefit analysis will help you determine whether or not your project can be successful. It can also help you identify changes that can be made in order to ensure the success of your work.


We offer a cost-benefit analysis software tool that provides comprehensive functionality in an easy-to-use system. This tool combines meaningful features and options with helpful automation to give you a full view of your business. If you would like more information on our cost-benefit analysis tool, please call us at +1 310 414-3222 or visit our contact page .


In order to ensure that your cost-benefit analysis is truly useful for your company, you must make certain that it incorporates all necessary aspects of the project. At a minimum, a cost-benefit analysis should factor in the following components:

  • Development costs
    This includes the time required of the development team, management and administrative staff. Remember, too, that time spent on one project is time spent away from other, potentially more profitable projects. Any costs associated with tools, technology or other non-human resources should also be factored in.
  • Projected sales
    The identification of target sales goals should include expected sales and revenue volume at different price points to best identify the ultimate product price.
  • Sales costs
    When estimating sales revenue, any cost of selling your product should be included. This may include advertising, sales team commissions or salaries and more.
  • Maintenance costs 
    The world of software creation is never a one-time thing. Practically every software product that is developed will have ongoing corrective, adaptive or perfective maintenance tasks and associated costs. There are also planned updates or enhancements to the program that must be considered. Each of these costs should be factored into the original project from the outset.


Performing a cost-benefit analysis for your software development projects before they begin is how smart companies
prevent unnecessary losses and ensure the best chance of success for the software once it hits the market.

Armed with the right information, you will be able to:

  • Accurately price your product
  • Plan updates and support need
  • Allocate resources
  • Identify key product features
  • Create project schedules

Critical business decisions such as these should never be made without sufficient data. Doing so puts you one step closer to failure. The wealth of decisions that can be made from the information that a cost-benefit analysis yields has the power to make a direct impact on your bottom line.


There are many estimating models available but not all of them offer comprehensive functionality. Galorath’s cost-benefit analysis software model gives you all of the power you need in a system that you can manage and use with ease. It combines the best of automation to simplify work for you with the robust features you need to get the full picture for your business.

Contact us today or call us at +1 310 414-3222 to learn more about how your business can benefit from this powerful tool and process.

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