We’re building the business case for switching platforms, and I keep seeing two different cost-saving narratives. One focuses on licensing—“Platform A costs X, Platform B costs Y, therefore we save Y-X.” The other focuses on developer efficiency—“Platform B is easier to use, so we need fewer developers or they work faster.”
Both are true in theory, but I’m trying to break down which one actually dominates the financial picture. If you switch platforms and the licensing is 20% cheaper, that’s real savings. If you switch platforms and developers can build twice as fast, that’s bigger savings. But are they equally real?
I suspect the licensing argument is easier to make to finance because it’s a clear, tangible line item. But maybe the developer-time argument is actually bigger, it’s just harder to quantify because nobody wants to admit they’re not working at full efficiency right now.
I’m also wondering whether “faster development” actually translates to cost savings or just workload shifting. If a developer can build a workflow in one day instead of three, does that mean you need fewer developers, or does it mean the same developers can tackle more projects? Those are different financial outcomes.
Has anyone built a real cost model where they actually tracked licensed costs plus estimated developer time, and could show which one dominated? I’m trying to understand what I should focus on in the business case.
We separated the numbers. Licensing savings were about $30K per year. Developer time savings were about $90K per year based on reduced implementation time, fewer maintenance issues, and less integration work. Total $120K.
But honest answer: one developer who was at 30% utilization on integration work went to 5% utilization. That didn’t mean we fired them or reduced their salary. It meant they became available for other projects. The cost savings came from not hiring the next resource we were going to bring on. That’s real savings, but it’s not a direct line item.
The licensing part is conservative and easy to defend. We can point to the contract and say “this is what it costs.” The developer time part requires assumptions. How much is a developer’s time worth? Are they fully utilized right now or are they partially available? Would you actually hire fewer people, or would you just reallocate them?
For finance, I’d separate them. “Licensing saves us $X because the contract is cheaper.” “Developer efficiency saves us $Y based on reduced implementation time,” but frame the developer savings as “cost avoidance” not “cost reduction.” We don’t fire the person; we avoid hiring the next person. That’s real, just harder to prove.
In our case, developer efficiency dominated. But that’s partly because our developers are expensive and our licensing costs are already reasonable. If you’re paying extreme license fees, licensing savings might be the primary driver. It depends on your labor costs relative to your software costs.
Build the model with real numbers. Plug in your actual developer salary, your actual current licensing cost, your actual implementation time. Don’t use industry benchmarks because your situation is probably specific. The biggest financial driver will usually be obvious once you have real numbers.