Profitability App

How to increase software house profitability?

Of course, raising your prices and cut salaries, but your clients and employees may not be too happy about that.

The alternative is to better manage how your team time is spent and how your projects are delivered (time, scope, budget).

We asked ourselves a long time ago: how should we operate to get a healthy profit margin?

The profit that is too high is a sign that we’re not investing enough, too low margin means we’re getting into trouble.

The biggest costs in the software business are developers salaries, so it’s very important how precious time is spent (utilization).

On the other side, the biggest revenue stream is coming of course from clients, so it’s crucial to meet the expectations (requirements, deadlines, overall happiness).

As a C-level manager, you need to automate and delegate as much as possible, to make sure you have a lot of space for better decision making, and on top of that, your private life.

You become responsible not only for your own work but for the work of others.

Talents.

Acquiring talents is important, but to keep them fired up, inspired and motivated is a different game. You need to provide interesting projects and manage their ambition. You need to make sure their work is interesting and optimal workload (utilization ratio).

When you’re sure that the time is well spent you need to check if you’re having enough margin on the sold working time. To be 100% sure you need to manage the profitability of every person in the company and every project you’re working on.

Simple estimations and time tracking seems enough, but only to a certain point.

This is why we came up with the Profitability App.

To make sure our developers have a perfect utilization ratio, and our estimations don’t eat more they need.

Knowing where you gain and burn the most is the best way to not only cut but to completely avoid surprise costs.

Ultimately - generate higher profit.