Phased Software Development: How to Get Custom Software Without a £20k Lump Sum

What Is Phased Software Development?

Phased custom software development means releasing software in smaller, usable stages rather than building everything before launching.

For example, say you need a custom order management system. Your full wish list might include order processing, stock management, customer accounts, invoicing, reporting, supplier integrations, and automated notifications.

Why Does Custom Software Need a Large Upfront Budget? 

Custom software costs depend on its size and complexity. Much of the work happens behind the scenes, such as security, user access, integrations and data management. That’s why a business platform in the UK can cost £20,000 or more, often before anyone starts using it.

A phased approach makes this easier. Instead of asking, “Can we afford the whole platform now?”, ask, “What’s the smallest useful version we need first?” Start with the most important features and add more as your business grows.

How Does a Phased Build Work?

Start With a Discovery Phase

Discovery is where you document current processes, determine the issue the software will resolve, understand user needs and determine what functions you are really looking to put in the first version. At the very least, you may discover that during discovery, you only need to consolidate customer data and generate quotes on a regular basis and keep track of whether they’ve been approved or not. There could be some advanced reporting, CRM integrations and follow-ups that could be handy, but perhaps not in the initial build. 

Phase One: Build the Smallest Useful Version

Phase One follows the MVP approach. For an internal operations platform, it might be a single dashboard where staff create jobs, assign them and track progress. Later, automated customer notifications, accounting integration, and management dashboards could be added to the features. It can also be used to determine needs that may not have been discerned during planning. Once staff start using the software, they might find that they don’t need one of the features that they thought was crucial but need a very small function that can save lots of time in manual tasks.

Phase Two and Beyond

Later phases should be based on what you learn from real use, not just the original wish list, which is the main difference between agile and waterfall development. For instance, in the case of an order management system, stock visibility and supplier information could be a feature that is required on a day-to-day basis, so it may be added on to the already existing functions in Phase Two. Phase Three could add automated reporting, accounting, and system integrations.

There is also a natural decision point throughout the process. You can evaluate what you have achieved at the end of each stage and decide if your next step is still commercially viable.

Does Phased Development Mean Monthly Payments?

Not necessarily. The payment could be agreed upon per phase, milestone payments, or agreed upon payment of the amount of time spent in each phase in a development process. Alternatively, the cost of discovery might be addressed at the same time, and the payment scheme for development then determined. The key is the payment structure should be the same as the delivery structure. It’s important to grasp what each payment is for and what will be there when that period is complete.

What Should Be Included in the First Phase?

The first phase should concentrate on the workflow, which has the highest operational and commercial value. For each additional integration, dashboard, user role and automation, there will be development and testing needs. Ask one question about each feature: does the first version need this to solve the main problem? If the answer is “no”, then it can be added in a later phase.

What Are the Risks of Phased Development? 

Phased development lowers the upfront cost, but it brings risks to plan for. The main one is weak foundations: if Phase One is built only for today’s needs, later phases can force a rebuild. If you plan to give customers access in Phase Three, the Phase One database and permissions must be designed for external users from the start. The UK Government’s Service Manual recommends separate development, test and live environments.

Is Phased Software Development Right for Your Business? 

If you have a limited budget, the software can be broken up into helpful chunks, or if you anticipate needs changing after people begin using the system, a phased approach can be helpful. It is not always appropriate where each element has to be in place at the same time to make the system function or where regulatory and technical requirements are closely linked; they cannot be implemented in stages.

The aim isn’t simply to split a £20,000 project into four £5,000 invoices. The phases should be technically and commercially feasible. Each stage should have a clear result and advance the software towards the final product.

Build What You Need First, Then Grow It

It’s not always necessary to pay the full price of the software vision all at once. Phased software development allows you to adopt the core features first and then add additional ones as you go. At RVS Media, we build custom software ranging from internal tools to SaaS platforms, always shaped by the business problem it needs to solve. If the cost of a full build is the main blocker, let’s work out what a successful Phase One looks like for your business. Talk to our team and we’ll map out the first phase with you.

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