Once upon a time, every groundbreaking tech project was an idea waiting to be transformed into reality.  Yet, the majority of software projects didn’t survive the journey from conception to market launch — while some of the ideas grew into successful ventures, many others faltered along the way. So, is there a strategy that increases the project’s chances of success? 

Following a proven software product development process coupled with strategic marketing initiatives could be half the battle in this case. In this article, we will focus on the technical side of the issue and explain what a structured approach to software product development looks like. 

Software Product Development Process vs Software Development Lifecycle

Often mixed up with the software product development process, the software development lifecycle refers to the series of stages or phases that a software product goes through from inception to retirement. It represents the progression of the software product through different states over time. The lifecycle provides a high-level view of the evolution of the software product from concept to end-of-life, just like in our decade-long partnership with Mogami, where we developed three distinct iterations of the personal finance applications, employing progressively advanced technology stacks.

The software product development process, in turn, refers to the overall series of activities and steps involved in conceiving, designing, building, testing, deploying, and maintaining a software product. 

Olexandr Boyko: Delivery Director at SPD Technology

Olexandr Boyko

Delivery Director at SPD Technology

“The difference is that the software product development lifecycle can last for years, and it is much more than just the implementation of a specific software development project. Common stages in the software development lifecycle include planning, analysis, design, implementation, manual and automated testing, deployment, and maintenance.”

In addition, there is one more concept you should know and distinguish it from the product development process and lifecycle – software development methodology. It refers to the specific approach, set of practices, principles, and guidelines used to execute the software product development process, providing a structured framework for organizing and managing the development activities.

Both a well-planned software product development process and a well-suited product development methodology are very important to the success of your project. We will describe both and share some valuable insights that are based on SPD Technology’s experience.

Software Product Development Process in 9 Steps

Now, after the essence of the software development lifecycle and process become clear, let’s review the essential stages in the life of any software development product, with a brief description of each one.

Steps of software development process

Ideation and Planning

At the heart of every innovation lies an idea — yet, the true measure of its potential lies in its quality and viability. So, how can you assess the strength of your idea? What can you do to improve it?

The answer to these questions is brainstorming—the first thing you should do while building a software product. Traditional brainstorming sessions involve gathering a diverse group of stakeholders and encouraging them to freely share ideas, thoughts, and suggestions related to the project.

In addition to brainstorming, at this stage, you are welcome to use mind mapping. This technique stands for visually organizing ideas and concepts in a hierarchical structure, starting with a central theme or topic and branching out into subtopics and related ideas. Also, don’t skip the SWOT Analysis that allows for identifying the internal strengths and weaknesses of the project, as well as external opportunities and threats in the market. 

Discovery and Market Research

The next step is to find out whether your product-to-be is what the market currently needs. Find out the market demand for the kind of products you intend to build, and do the research into your potential customers’ needs.

It will also be a good idea to brainstorm with your team and try to jointly answer the following questions:

  • What problem does my product solve, and is it a significant pain point for our target audience?
  • Who are our target customers, and what are their demographics, preferences, and behaviors?
  • How does our project differentiate itself from existing solutions or competitors in the market?
  • Have we conducted market research and validation to assess the demand for our product or service?
  • What is our unique value proposition, and how compelling is it to potential customers?
  • What are the key features and functionalities of our product or service, and how do they align with the needs of our target audience?
  • How scalable is our idea, and what are the potential growth opportunities in the market?
  • What are the potential risks and challenges associated with our startup, and how do we plan to mitigate them?
  • What is our revenue model, and how do we plan to monetize our product or service?
  • What resources, including team members, technology, and funding, do we need to bring our startup idea to life?
  • Can we somehow benefit from the current trends and predict the future ones?

Gathering Requirements and Conducting Feasibility Analysis

When the market research is complete, it is time to figure out how to build your product from the software development perspective. Your development team must understand the project goals and determine how feasible they are to implement.

Typically, the following requirements should be gathered:

  1. Functional Requirements: specifying what the system should do, and defining the system’s behavior in terms of inputs, outputs, processes, and data.
  2. Non-Functional Requirements: defining the system’s characteristics or qualities, like performance and scalability. To get a better idea of what these two groups of requirements represent and how to gather them, you are welcome to check our article on functional and non-functional requirements for a document management system (DMS)
  3. User Requirements: describing what the users expect from the system, including roles and permissions, user interfaces, and customization options.
  4. System Requirements: specifying the hardware, software, and infrastructure needed to support the system.
  5. Business Requirements: capturing the business objectives driving the project.
  6. Constraints: defining limitations or restrictions on the system’s design and implementation.
  7. Quality Attributes: specifying the desired software quality levels for various aspects of the system.
  8. Documentation and Training Requirements: defining the need for user manuals, technical documentation, and training materials.
  9. Testing Requirements: specifying the types of testing needed to ensure the system meets its requirements.
  10. Change Control and Versioning: defining how changes to requirements will be managed and tracked throughout the project lifecycle.
  11. Acceptance Criteria: specifying the conditions that must be met for the stakeholders to accept the system.
  12. Dependencies: identifying any external factors or dependencies that may impact the project’s execution or delivery.
  13. Risk Assessment: determining potential risks to the project’s success and strategies for mitigating them.

Product Design

This is the phase during which the whole of your software product’s design is created, including the definition of the workflows, standards for the project, tech stack, and functional capabilities. The creation of the final prototype takes place during this phase too.

The stages of product design typically include:

  1. Requirement analysis: gathering and analyzing requirements from stakeholders, understanding user needs, and defining the scope of the project.
  2. Market research and feasibility study: conducting market research to understand the competitive landscape, target audience, and feasibility of the product.
  3. Conceptualization and ideation: brainstorming and conceptualizing ideas based on the gathered requirements and market research.
  4. Prototyping and design: creating prototypes, wireframes, and mockups to visualize the product’s user interface and user experience.
  5. UI/UX design: creating visual designs, defining navigation flows, and ensuring usability and accessibility.
  6. Architecture design: designing the software architecture, including system components, modules, and their interactions.
  7. Technical design: designing database schemas, APIs, and integration points with external systems.
  8. Review and validation of stakeholders: ensuring alignment with requirements and expectations, as well as resolving design issues early.
  9. Creating documentation: documenting the design decisions, specifications, and guidelines for developers, testers, and participants.
  10. Design refinement: revisiting earlier stages of the design process to incorporate new information or address evolving needs.
  11. Finalization and the handoff to development: ensuring that all design decisions are well-documented and communicated effectively to the development team.

These stages may vary depending on the specific methodology or approach followed in the software development process, and there may be overlaps between stages to accommodate changes and feedback throughout the product design process.

MVP Development and Launch

The Minimum Viable Product (MVP) is the most basic version of a product that can be released to the market while still providing value to users. It typically includes only essential features and functionalities necessary to address the core problem or need of the target audience. It is important to launch your MVP according to the LEAN development approach, a methodology that focuses on maximizing value delivery to customers while minimizing waste and optimizing resources.

Here are some tips to consider while developing an MVP:

  • Even though the MVP is minimal, it should still provide a positive user experience, prioritizing usability, simplicity, and intuitive design to ensure that users can easily understand and interact with the product.
  • While focusing on simplicity, ensure that your MVP is built on a scalable architecture that can accommodate future growth and feature enhancements.
  • Establish feedback loops with users, stakeholders, and development teams throughout the development process. 
  • Define key metrics and performance indicators that align with your product goals and objectives.
  • Anticipate that your MVP will evolve based on user feedback, market validation, and changing requirements. 

Integration and Testing

The approaches to system testing and integration may vary, but this phase typically involves Quality Assurance experts using multiple frameworks and continuous integration for high-quality testing. Both manual and automated testing make sense for the majority of software development projects. Only when the software is considered bug-free, can we move on to the next step.

Below are some suggestions to make the testing process the most effective:

  • Start testing early to identify and address issues sooner, reducing the cost and effort of fixing them later in the process.
  • Define clear test objectives and goals to understand what you’re trying to achieve with your tests, whether it’s validating functionality, assessing performance, or ensuring security.
  • Utilize test automation tools and frameworks to automate repetitive and time-consuming testing tasks.
  • Prioritize testing activities based on risk, impact, and criticality of features. 
  • Employ a mix of testing techniques, including functional testing, regression testing, performance testing, security testing, usability testing, and exploratory testing.
  • Implement Continuous Integration (CI) and continuous testing practices to automatically build, test, and deploy changes to the software. 


At this stage, your software project moves into production. In the future, changes and further improvements will be delivered, but the core product is ready for the end-users. Simple projects can be launched in a single release, and more complex ones require a staggered release.

Best practices for the deployment process include:

  • Automation of deployment processes wherever possible, leveraging tools like Jenkins, Travis CI, or GitLab CI/CD.
  • Adoption of infrastructure as code practices using tools like Terraform or AWS CloudFormation.
  • Deploying changes in small, incremental batches rather than large, monolithic releases.
  • Monitoring the health and performance of deployments in real-time using monitoring tools like Prometheus, Grafana, or Datadog to track key metrics such as response times, error rates, and resource utilization.

Maintenance and Post-Release Support

After receiving enough real-world user feedback, your development team can focus on making adjustments that will improve the product’s performance. Maintenance and regular updates will help you cover any additional needs of your users.

The activities in this process include, but are not limited to:

  • Bug fixing
  • Enhancements and updates
  • Identifying and addressing security vulnerabilities
  • Performance optimization
  • Configuration management
  • Data management
  • Documentation updates
  • User support and training
  • Monitoring and alerting on any anomalies
  • Feedback collection and analysis
  • Release management. 


Last but not least, marketing activities must begin together with the software product development process. Even if you don’t have a complete product, it makes sense to start the preparations and promote it as much as you can to ensure the success of the whole project.

We already mentioned marked research that happens before the start of the development process. During the development process, you may focus on building and optimizing a user-friendly, informative, and engaging website to showcase the software product. You should optimize your website and landing pages for search engines, and make sure that you leverage relevant keywords, meta tags, and descriptive titles to attract organic traffic.

Every business scenario is unique, so you should work on specific actions and strategies with your marketing team. Those actions may include:

  • Building and nurturing an email list of prospects, leads, and potential customers.
  • Collaborating with influencers, experts, bloggers, and thought leaders to amplify your marketing efforts.
  • Offering free trials or demos after the release of the product
  • Monitoring metrics such as website traffic, conversion rates, lead generation, customer acquisition cost (CAC), and return on investment (ROI) to improve your strategy.

Time-Tested Product Development Methodologies to Choose From

While the software development process defines a structured framework for what we should do step-by-step to build a tech solution, a software product development methodology, in turn, defines how we will do that. Numerous existing software product development methodologies can help you deal with projects of different levels of complexity, but which one would work best for you? To make the right choice, you have to analyze the next factors: 

  • Project requirements stability
  • Customer involvement and feedback
  • Project complexity, size, and business goals
  • Time-to-market requirements
  • Risk tolerance
  • Dedicated development team experience and expertise
  • Organizational culture and processes

Now, let’s dwell on the five most common software development methodologies, highlighting their advantages and disadvantages to help you decide.


Also known as a linear sequential model or a classic software development lifecycle model, Waterfall is one of the oldest and most popular software development models. It is based on the project team consecutively following each step of the entire software development lifecycle. In the real world, there is a slight overlap between the steps—you receive customer feedback during the process of building a new software product and revert to the previous step to make the required changes.

Waterfall development methodology

The name “Waterfall” describes a plan-driven software product development process with a strict order, where the phases are cascaded to each other and flow downwards like an actual waterfall.

Waterfall is great for projects with:

  • Clear and stable requirements
  • Predictable and repeatable processes
  • Fixed budget and schedule
  • Legacy Systems and Maintenance Projects

However, if you are introducing a new product and want to have the freedom to change the direction of the project after receiving user feedback, Waterfall may not be the right option for your case. This software product development process is logical and transparent. However, it has one main disadvantage — a lack of flexibility. For this reason, projects eager to stay flexible and adaptable to rapid changes choose the next software development methodology. 

Agile and Scrum

Agile methodology is a set of principles that you need to follow to build an effective new software product development strategy. If McKinsey is to be believed, the benefits of Agile methodology are undeniable. Compared to companies that don’t use Agile, 93% of organizations that do use it reported better customer satisfaction, 76% reported better employee engagement, and 93% reported better operational performance.

Scrum is the most popular practical embodiment of this software development methodology, used by 81% of Agile development teams according to the report by Digital.AI. In other words, Scrum is a real-world framework or a set of tools and instructions that are based on high-level Agile principles. The Agile/Scrum combination can be considered a separate software development methodology worth a more detailed explanation.

Agile and Scrum development methodology

While the Waterfall software product development process has its strict flow, in Agile methodology, teams work in “sprints”. These sprints can last anywhere between two weeks and two months. At each sprint, the development team must deliver a usable software product with a view to receiving feedback on the improvements that need to be made.

Olexandr Boyko: Delivery Director at SPD Technology

Olexandr Boyko

Delivery Director at SPD Technology

“The Agile methodology is great when you need to quickly respond to the needs of your users and change the direction of your project, sometimes by making radical changes to your plans. You don’t need a complete list of the requirements or a statement of work before you begin the journey. Just choose a direction to move forward and keep in mind that when you decide to make a change, it won’t damage anything.” 

Agile is great for projects with:

  • Dynamic or evolving requirements
  • Cross-functional teams
  • Time-to-market pressure
  • Complexity and high risk

Here is a quick example. Suppose you want to build a product with multiple features. With the Agile approach, it will take a sprint of 2-4 weeks to build a functional product with one single feature, but this product will be usable and ready for user evaluation.

The Agile approach is the best fit for distributed software development teams that expect changes and continuous updates along the way. This means that startups and companies that are testing new products will benefit from this model the most.

On the other hand, if you are tight on budget and time, or you know precisely what you want to do, Agile may not work that well. Because of the approach’s dynamic nature, following Agile can easily lead to the initial budget being exceeded or conflicts being created in the existing software architecture.

Incremental and Iterative

These methodologies combine the predictability of Waterfall and the flexibility of Agile. The Incremental and Iterative development processes are similar in their focus on small parts of the functionality. The difference between them lies in the actual release deliverables.

In the Incremental software product development process, you add one feature or function at a time. You can think of it as building a working Minimal Viable Product with basic functions and adding new features later.

Incremental planning software development methodology

The Iterative process is different in that you must have all the planned features in the initial release – at least the most basic versions of them.

Iterative planning software development methodology

These processes will allow you some flexibility, while also helping you keep everything going by the global plan. You may consider them for large projects with well-defined scopes, but choose something else if you don’t have a clear long-term technology plan.

How are Incremental and Iterative different from Agile?

  • In Incremental, you build a complete feature for each sprint
  • In Iterative, you build a version of a feature for each sprint
  • In Agile, you do both— you add new features one at a time and improve the versions of the existing features with each next sprint.


This software product development process is an improvement upon Waterfall and makes up for the latter’s biggest disadvantage: an insufficient amount of system testing. The V-Shaped process has a mandatory validation and verification step after each stage of the development effort.

V-Shaped software development methodology

The V-Shaped approach works for relatively small projects with requirements and scope that won’t change later. Compared with Waterfall, where there is a risk of discovering critical issues at the very end of the software product development process, with V-shaped methodology, you have an opportunity to be aware of any blockers early on.

If you have a large-scale project, need flexibility, and expect to be making changes based on user feedback, V-Shaped may not be the best development approach option.


The last software product design methodology we will talk about combines the flexibility of Agile, Iterative, and Incremental with the testing-driven nature of V-Shaped.

With each milestone, the scope of the project expands and risk analysis and planning become necessary again to prevent any possible failures during the software product implementation process.

The main goal here is to mitigate the risks. If you have a big budget and work on a big project with a significant amount of documentation that requires validation, you can consider this approach. However, Spiral is rarely used because of the time and costs required to implement it. Instead, it is often referred to as an example of critical thinking in the Iterative approach.

Regardless of the software development methodology your project requires, we have the necessary expertise to handle it. In our latest article, we explained how to build an enterprise-level mobile application — feel free to discover the development strategy right now!

Challenges That May Affect Your Software Product Development Process

It is impossible to build a new product and avoid mistakes, as they give you the experience to end up with a better result. Here is a short list of the challenges that you may encounter, along with the solutions to them. 

Software development process challenges

Unclear Requirements

Unclear requirements pose a significant challenge to the effective software development process. When requirements are vague or ambiguous, it ultimately leads to misunderstandings and project delivery delays. The best way to deal with this challenge, in turn, is continuous communication with stakeholders throughout the development process. It includes but isn’t limited to regular meetings aimed at feedback gathering and requirements refinements based on feedback from stakeholders and evolving project needs. Adopting an interactive approach that is at heart of Agile also allows for early validation of requirements and facilitates adjustments based on feedback. 

Ineffective Communication

In addition to unclear requirements, poor communication among team members, stakeholders, or departments can lead to misunderstandings, delays, and conflicts. To deal with this challenge effectively, establish clear channels for communication, encourage regular meetings and updates, foster open dialogue and transparency, use collaboration tools, and ensure that communication is clear, concise, and timely. Additionally, the effective way to avoid communication issues is choosing the right vendor with a proven success record in completed offshore software development projects. 


Redundant or duplicate efforts, code, or features can lead to inefficiencies, complexity, and increased maintenance overhead. Eliminating redundancy, in turn, helps streamline development, reduce costs, improve performance, and maintain code quality. For this goal, conduct code reviews, refactor codebase to remove duplicate logic, establish coding standards and best practices, promote code reuse, and leverage modular design principles.

Changing Scope

Changing scope is a common software development challenge which can occur due to various reasons, for example, shifts in business priorities, new stakeholder requirements, or emerging market trends.  Managing scope changes effectively, in turn,  is crucial for maintaining project stability, controlling costs, and delivering on time and within budget. However, for the projects developed according to different methodologies scope changes may have a different impact. 

While in the Waterfall methodology, changing scope significantly disrupts the linear software development progression, Agile is inherently flexible for project changes accommodation. To deal with this challenge effectively, regular sprint reviews and retrospectives should be an integral part of the Agile-driven software development process. Having a contingency plan to mitigate the impact of unexpected changes on project delivery could be an effective tactic for the projects being created according to the Waterfall approach.

Tech Debt

Addressing technical debt is essential for ensuring long-term sustainability, reducing risk, and maintaining agility in software development, while accumulating it, in turn, hinder productivity, scalability, and maintainability. To handle this issue effectively, it is necessary to regularly assess the codebase and infrastructure to identify areas of technical debt. This can be done through code reviews, automated code analysis tools, and feedback from developers.

Next, you have to prioritize technical debt items based on their impact on the system’s stability, performance, and maintainability. To seamlessly deal with each of the technical debt items, it is recommended to adopt an incremental approach, breaking down large refactoring tasks into manageable parts that can be tackled iteratively without disrupting ongoing development efforts.

Budget Constraints

Limited budget or resources can constrain the scope, quality, or timeline of software development projects.  To prevent this issue from hindering the effectiveness of your software development process, develop detailed budget estimates for each phase. Together with your tech vendor, estimate the expected cost for requirements gathering, design, development, testing, deployment, and maintenance. Break down costs into specific categories such as labor, tools, infrastructure, and third-party services.

It is also recommended to embrace Agile budgeting practices that enable flexibility and adaptation to changing project requirements and priorities. Allocate budget resources incrementally based on the evolving needs of the project, and adjust funding allocations as necessary during regular planning cycles.

Our Expertise in Implementing an Effective Product Development Process

For over 18 years, SPD Technology has continued to be a trusted software product development company for companies around the world, building advanced tech solutions for businesses from multiple industries.

We know how to outsource web and mobile app development and have real-world cases to prove it. Recently, our client—a leading provider of prepaid and payment products with 3500+ employees — was acquired by a bigger company. The new owners evaluated the management level, delivery, and internal processes of our client. After this, they decided to shift to Agile. This was done to completely replace our client’s sometimes inefficient Waterfall process with Agile and Scrum.

Our partnership with this client spans over 8 years, during which we delivered great results in an adaptive development approach inspired by the best practices of SCRUM and XP. The project management specifics of this case is that dedicated development teams working on the project were located in different time zones, so we had to constantly stay on the same page and coordinate the development efforts between US-based and Ukraine-based software engineers. As one of the most notable improvements in the internal processes of our client, we managed to deliver a Merchant Portal that facilitated the aggregation of over 8000 businesses within the United States in just two years.

# API development, # AWS infrastructure, # Data migration, # Payment integration, # Web development
Aggregated Merchant Portal  (AMP) Development for a Global Gift Cards Distribution Company 

Highlights Client Founded in 2001, Blackhawk Network (BHN) is a financial technology company that specializes in providing prepaid gift…

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The software product development process requires careful planning, collaboration, and adaptability to succeed in today’s dynamic and competitive market. Traditional methodologies such as Waterfall prioritize sequential phases of development, with requirements gathering, design, implementation, testing, and deployment occurring linearly. While this approach provides structure and predictability, it can be rigid and inflexible in the face of changing requirements or market conditions.

In contrast, Agile methodologies, including Scrum, Kanban, and Extreme Programming (XP), promote iterative and incremental development, with a focus on delivering working software early and often. Our practical experience in building advanced solutions and mitigating common web application development challenges has long proven that this methodology promises better collaboration, improved adaptability, more informed decision-making, and iterative value delivery, leading to successful project implementation. 

Having client success and accountability as our core business values, we have excelled at Agile software development for more than 18 years already, fostering a culture of innovation, continuous improvement, and customer-centricity in over 100 success stories, some of which, include the world’s leading companies like PitchBook, Poynt, and Space Needle.


  • What are the Steps of a Software Product Development Process?

    The stages of the software development process may include but are not limited to:

    • Ideation and Planning
    • Discovery and Market Research
    • Gathering Requirements and Conducting Feasibility Analysis
    • Product Design
    • MVP Development and Launch
    • Integration and Testing
    • Deployment
    • Maintenance and Post-Release Support
    • Marketing.