How to Run a Software Product Development Process

The software product development process is complex and includes crucial steps, numerous possible challenges and considerations, and two critical methodologies. Whether developing a software product with a full-time in-house team, collaborating with a development partner, or outsourcing your project, understanding the basics, complexities, and intricacies of the software product development life cycle is essential for success. So, let’s talk in detail about the software development process and how to run it with maximum efficiency. 

What is Software Product Development?

Software product development, also known as software development life cycle (SDLC), combines stages, methodologies, tools, and management models to ensure effective teamwork, stay on budget, adhere to best practices, and deliver a software product following project requirements. The software product development process usually involves technical and non-technical team members and goes beyond designing, coding, and deploying products. 

Stages of the Software Development Process 

To better understand how to develop a software product, it is essential to understand all critical stages of this process. 


Every product development starts with an idea. To ensure that this idea can succeed in this competitive landscape, it is crucial to conduct brainstorming sessions to answer critical questions about your future product vision, its mission, the tech stack and development team you need to deliver the product, and the potential budget. Based on this information, you can create a product roadmap, compose a list of core features, and define potential risks and setbacks early on. 

Discovery Phase

You must conduct thorough research to ensure that your product will meet the market demand, reach the target audience, and have a competitive advantage over similar solutions. If you lack the expertise within your team, consider hiring professionals with relevant experience. 

The discovery phase is critical in the custom software product development process. More and more companies choose to find a reliable IT partner for this stage. With relevant expertise on similar projects and an extensive team of tech and non-tech professionals, an IT service provider can help you to create a product development plan, realistic timeline, detailed budget, and market strategy. Also, you will get a comprehensive report with market research, industry overview, and information about significant competitors. Investing in discovery can help you to avoid many risks and useless expenses down the road. 

Setting Requirements and Feasibility Analysis

When you finish brainstorming, discovery, and market research, it is time to set precise project requirements and conduct a feasibility analysis. At this stage, you must thoroughly analyze expected product development and launch deadlines, key project milestones, team size and structure, tech stack, estimated ROI, and resource allocation. After you finish, all this information must be included in the software documentation. 

Product Design

This stage involves creating the software architecture of your product and designing the user interface. Based on these, you and your team can decide on tech stack, workflows, system requirements, and methodologies if you haven’t done it during earlier development stages. Also, during product design, many software development teams prefer to build a minimal viable product (MVP) with only key product features. It can help you introduce a product to the target audience, gather valuable feedback, and add new features and functionalities based on these insights to meet customer demands and deliver better results. 

Product Development

When all strategic planning, analysis, and software documentation are finished, the product development team can finally start, probably the most critical phase. Software developers write code during this stage, and designers work on the user interface. The product development stage usually takes the longest time. If, during previous phases, you set precise requirements and developed a comprehensive product roadmap, the development team should easily follow instructions and create your software product.  

Testing and Quality Assurance

Your product must be perfect in this competitive landscape to gain a competitive advantage. So, after coders and designers finish their job, the next step in the software development process is testing and quality assurance.

Depending on your chosen management model, QA engineers use different tools, frameworks, and methodologies to identify bugs and errors. At this stage, releasing the beta version and gathering additional user feedback is crucial. After all, bugs are identified and your development team corrects them, the final product is ready for launch. 


When your software product is ready for a broad audience, the development team must collaborate with marketing and sales professionals to launch it. Some products require deployment in several stages; some can be introduced in a single release. Also, during this phase, you and your team need to implement one of two options for product deployment: on-premise or cloud-based. This decision depends on your product’s software architecture, tech stack, and system requirements. 

Ongoing Maintenance

After release, your team will receive even more user feedback and can evaluate your product’s performance in real-life circumstances. At this stage of the software product life cycle, software developers must make adjustments and quickly solve problems. Investing in customer support and regular updates will ensure smooth performance, data security, and user satisfaction. 

Software Development Methodologies

Before the software development process starts, you need to choose a development methodology. The two most popular and widely used options are Waterfall and Agile models. There is no better or worse option. Every methodology has its pros and cons and suits different kinds of projects. 


This approach is also known as linear or classic. Waterfall is the oldest development model and consists of consequential steps. Every process must be 100% completed before moving to the next one, and stages can’t overlap. The Waterfall approach can be challenging to implement in most software development projects. After receiving feedback during development, team members must return to previous steps and make necessary changes. 

However, this approach has its advantages. Estimating the final budget and understanding tasks is more accessible, especially for new developers. If a project is outsourced or handled by an IT service provider, the Waterfall model requires less client involvement. This paradigm is most suitable for projects with precise requirements, explicit business needs, and highly accurate papers. 

Agile or Scrum

Agile product management methodology is the main alternative to Waterfall. This approach divides the development process into small and easily consumable modules and iterations called sprints. This model is most suitable for long-term complex projects and allows developers to release new product versions several times, making adjustments based on user feedback. Also, user stories are widely used in the Agile model to meet customer needs better and improve user satisfaction levels. 

Scrum is a development framework based on Agile principles. It involves clients more and leverages cross-functional team structure. Scrum is also known for its emphasis on experimentation and adaptability to changing circumstances. Often, these two approaches are combined to achieve more significant results. Agile-Scrum development is more flexible, involves clients more, and leads to better communication. However, it is more time-consuming and lacks Waterfall’s documentation efficiency. Sometimes, increased client involvement can be seen as a disadvantage. 

Challenges and Considerations

Even with a perfect product development plan, it is impossible to avoid issues altogether. Here are the most common challenges and setbacks you may encounter during the software development process and tips for overcoming them. 

  • Unclear requirements. The lack of a crystal clear product development strategy is one of the significant challenges software developers can face. This problem can easily result in wasted time, budget, and resources. To avoid this, you should always take the planning stage seriously. Additional investments in market research, business analysis, or discovery phase allow you to avoid many potential setbacks. 
  • Redundant features. Creating a software product of your dreams with numerous features and advanced functionalities is always tempting. However, many of these features can become redundant and lead to needless spending. Launching MVP and adding new features based on user feedback can help you allocate resources efficiently and create a better user experience. 
  • Lack of proper documentation. Unclear or inadequate software documentation may lead to numerous problems, including challenges during onboarding new developers, maintaining a consistent codebase, and troubleshooting issues. Prioritizing documentation of product requirements, design decisions, APIs, and other aspects will lead to more effective collaboration and knowledge sharing during development. 
  • Ineffective communication. This problem can lead to missed deadlines, development delays, and misunderstandings between clients and IT professionals. The right project management approach, tools, and development methodology can usually avoid these issues. 
  • Tech debt. The term describes decisions made during software development that can quickly pile up and cause issues later. It includes outdated technologies, infrastructure with low scalability, or inefficient practices. To avoid a negative impact on your product and stay ahead of the competition, regularly assess your product design decisions, identify areas for improvement, and invest in modernizing your tech stack. 

Conclusion: How to Run a Software Product Development Process

Running a customer software product development process is not an easy task. It requires a lot of expertise, numerous skills, and strategic thinking. Understanding the software development process stages, primary development methodologies, and potential setbacks you may encounter is the first step to successfully launching a software product. Even if you are partnering up with an IT services provider or outsourcing vendor, knowledge about the product development lifecycle will significantly increase your chances of success in this competitive landscape of the software development industry.


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