Business September 24, 2019 Last updated January 22nd, 2020 1,104 Reads share

The 3Cs That Will Boost Your ROI of Software Development

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Innovative products, a loyal customer base, and consistent top-line growth – that’s the holy trinity of success for any ISV. Top ISVs invest significantly to drive quality, collaboration and customer centricity. ROI of software development is closely linked to those attributes. But, how do they do it? Let’s find out.

Independent software vendors or ISVs are facing intense competition, burgeoning costs and declining IT spends, making it challenging to run profitable businesses. According to Forrester, the number of ISVs has grown from 10,000 firms ten years ago to more than 100,000 today, and the advisory firm expects there to be over 1 million firms by 2028. ISVs are struggling to accelerate innovation, integrate new-age technologies with their products and ensure superior customer satisfaction while optimizing operating expenditure. Most ISVs operate with smaller teams consisting of expert resources; however, what matters is the revenue per employee. A 2018 survey found that 84% of the ISV Connect community has 50 or fewer employees. Keeping that in mind, how does one enable steady top line growth and enhance the return on investment (ROI) of software development? Let’s quickly look at two critical components that affect ROI.

If gains are understood as the overall revenue accruing from the sale of products, ROI would directly depend on how well an ISV can bolster revenue growth and manage its costs.

Here are three key components of a prudent strategy to boost software development ROI:


Beating the competition requires you to stay ahead of the curve by taking innovative products to the market quickly, responding nimbly to customer demands and delivering quality products and services. All those are intertwined closely with organizational culture and your people. Building a culture of quality, promoting collaboration across industry participants and adopting methodologies such as Agile and DevOps, can all strengthen your top line growth. Let’s see how.

The recent World Quality Report 2018-19 found that the primary reason for testing is to ensure customer satisfaction. By delivering software that meets clients’ business goals and enables them to achieve a sustainable competitive edge, ISVs can reap the benefits of a loyal customer base. What does that imply? More cross-selling and up-selling opportunities, better customer retention, and good word-of-mouth. All of that translates to revenue growth.

Secondly, build a culture of collaboration – within and outside the organization. Strategic partnerships with the right, reputable organizations within the industry can provide ISVs with niche skills and expertise which are much harder and expensive to build organically. For instance, joining forces with an expert cybersecurity boutique software company or collaborating with a start-up blockchain lab can help you add unique features to your product. On the other hand, promote collaboration among teams within the organization. From coders and testers to functional leads, everyone must work together to ensure a smooth software development lifecycle, leading to continuous improvement and better resource utilization.

DevOps is not a buzzword. It signifies a drastic cultural shift towards people-centricity, open-mindedness, accountability, and clear communication between teams. It ensures development, QA and operations work towards a common goal – delivering defect-free software quickly and efficiently. Disparate IT silos is a thing of the past and ISVs must keep that in mind.

Customer Centricity

The ability to win, serve, and retain customers by providing high-quality software is the primary objective of any ISV. However, ensuring customer loyalty in the age of start-ups, digital disruption and evolving client expectations is no easy feat.

What separates leaders from laggards is the point of view. Instead of focusing on fulfilling the customer’s immediate needs, leading ISVs anticipate the demands of the customers’ customers. Those insights can help drive improvements in existing products, enabling customers to achieve their business goals. By assisting them to drive their business strategy, ISVs can become strategic partners and drive up their CSAT and NPS. And not to forget, word-of-mouth is the most successful form of marketing for ISVs. According to B to B Magazine, 61% of IT decision-makers report that recommendations from colleagues are the most important factor when deciding to purchase the software.


The most obvious of the three components, cost plays a critical role in determining the ROI of software development. How does one optimize costs in a time of talent scarcity and rising personnel costs?

Build small, multi-disciplinary teams and ensure an optimum resource mix of seasoned solution architects, mid-level project managers and foot soldiers – the developers. If you were to onboard a team of ten, the mix should look something like this:

  • 1-2 highly-experienced solution architects
  • 3-4 seniors with mid-level experience
  • 5 core developers

Outsource repetitive, non-value adding activities or a chunk of the development work to free up the bandwidth of your team for engaging with clients, gathering business requirements and driving innovation to scale products quickly. Consider working with a trusted managed services provider with a proven track record and sound functional knowledge.

Embrace the Software-as-a-Service (SaaS) format to alleviate costs arising out of complex, large on-premise installation projects. Not only does it allow development teams to work and collaborate remotely, but it also reduces capital expenditure required to procure expensive IT infrastructure. Moreover, SaaS allows ISVs to scale compute and storage up or down depending on business requirements, optimizing infrastructure costs.

The idea is to realize what is essential to your customers, how you can help them achieve their goals through product innovation and impeccable service, and what is your product road map. Once your product strategy is chalked out, applying the 3Cs will deliver the business results you are looking for – superior ROI of software development and delighted customers. Evaluating software productivity and quality, once considered impossible, measuring your software’s quality is becoming a common trend with tech businesses.

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Richa Pokhriyal

Richa Pokhriyal

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