Cost of outsourcing app development

Since 2010, we were providing small and big companies with custom software solutions. As a reputable IT company, we always strive to exceed customers’ expectations delivering first-class applications. And as the most frequently asked question concerns the cost of outsourcing app development we would like to lift the veil and provide professional insight on this matter.

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What defines app development cost

Your requirements

The cost of the development services primary depends on the type of the desired software product, its complexity, functionality, and design requirements. And depending on its simplicity, it may vary from $8,000 to hundreds of thousands of dollars.

Human resources

But one of the crucial factors that influences the cost is human capital. Appreneurs always look for the ways to cut down the expenses with no prejudice to the quality. The cost of outsourcing app development may significantly differ from the in-house software creation especially if it is offshore outsourcing. Applying to offshore outsourcing in the countries with lower labour and production costs will help to reduce the expenses related to the creation of the business app. But in this case, an entrepreneur should carefully choose a software partner as it is harder to control the development process when it happens in the different part of the globe.

Related expenses

Besides, software development involves expenses related to the hardware and developer fee that allows publishing apps in the app stores. For iOS developers, the membership in Apple developer program costs $99 per year, and for Android programmers, it is a $25 one-time registration fee.

Understanding of the needs

Finally, the thing that takes a heavy toll on app development expenses but often is underestimated is a clear understanding of the needs. Uncertainty results in continuous improvements and redevelopment dragging on the development time and hence causes shoot up the costs. Approaching to the developers make sure you have an understanding of company’s needs and a clear app idea, talk with IT consultant and get a proper estimation of the costs involved. Otherwise, get ready for the overspending.

In-house vs. Outsourcing

Hiring a third-party company to do a job for you is always a risk comparing to the creation of an in-house development team which is well-motivated and completely under control. You may listen to the dozens of stories that praise the merits of outsourcing app development, and at the same time, find numerous examples of horrible experience in this sphere. So what should you do?

What is outsourcing?

The outsourcing refers to the practice when customer company hands over a specific task to the firm that specializes in this activity and services. There are two types of outsourcing: offshore and onshore. The first one implies finding the organization that will perform a task for you in a different country or continent, while the second type refers to the search within the same country.
In-house development team
The main advantage of your own IT department and full-time programmers is that they are always available at the office and deal only with the company’s issues. In-house developers who work for you are immersed into your ideas and focused only on the solutions of company’s challenges. Being a part of the company they have a tangible interest in the results. The risks to be left with the unfinished project are significantly lower than when you outsource app development services. With a team sitting next to you, it is easy to be aware of what is going on any required time. This option provides full control over the situation letting change the directions and the strategy quite easily. Paying a regular salary there is no need to be afraid of extra fee for every newly implemented feature. Besides, in-house employees are always aware of the real situation in the company, and in a while, they get a better understanding of the business challenges the company face every day. This knowledge plays a crucial role in finding potential solutions.
The disadvantages of in-house team
The creation of new IT department within the company implies certain responsibilities, efforts and expenses.
  • First of all, the overall cost of full-time programmers may be much higher that you expect. Beside regular salary, this cost includes working space assignment, purchasing of hardware, payment for developer fee and regular training courses, health insurance and other benefits. These expenses may be reduced if you are a technical cofounder and take a bulk of compensation in the form of equity. If you don’t have enough expertise or time to head in-house IT department, there appears a necessity to hire someone who will be in charge of it. Altogether, the cost of hiring in-house development team can be prohibitive.
  • The second thing that should be kept in mind creating a new development department from scratch is the time required for its organisation. Forget about fast time to market strategy. At first, you should collect reliable IT specialists who meet company’s requirements and have sufficient expertise in the required sphere of software development. A productive team should at least consist of app developers, UI designers, QA experts and business analysts with experience of work in IT industry. Unlike outsourced developers who can be changed with a new project, full-time programmers should fit the company from both skill and cultural perspectives.
Hiring full-time developers you should take care of working and social obligations. This option is reasonable only in the case if you rely on a long-term commitment and need IT assistance regularly and continuously.
Why outsource
The cost of outsourcing app development services seriously varies from the company you hire, but if you compare it to an in-house team in long-term prospects, it is still will be cheaper to invite a formed team of experienced developers who has already worked with each other and can ensure smooth delivery. The cost of outsourcing is more affordable when outsourcing offshore in such countries like India, Russia, Belarus and Vietnam. Of course, the choice of the oversea developers maximizes the risks to get a poor quality application or even waste time and money getting no results. Outsourcing developers is a common practice among U.S. businesses, as it is a perfect solution for a short-term commitment. Outsourcing let entrepreneurs enlist an expert on a project basis without long-term obligations. This option is especially good when it is about one particular skillset for this period when you know for sure that in a few months you will need a specialist with another skillset. Finally, it is much faster to develop an app with a teamed up group of programmers who have been working with each other for a while and have an experience of delivering similar projects. You don’t need to recruit every member of the development department, you get a ready-made team.
How to minimize the risk of outsourcing
Quality. One of the drawbacks of the outsourcing is a lack quality control. Only if having a programming background, you can look at the code and say if it is of high quality, but even that doesn’t guarantee that the app will perform as it should. To mitigate the risk, you can hire someone local for consulting and code testing. Another way is to hire a company that provides quality assurance services and run tests throughout the development process. Start a collaboration with a small test project before working on a serious development case. Or you can run a technical interview with the candidates following the recommendations of Eric Ries.
Communication. When it comes to outsourcing a communication becomes a serious challenge especially if you outsource from the country which culture significantly differs from yours. Fortunately, modern technologies and the process of globalization smooth the borders between countries and provide conditions for better communication. One more thing that will help to reach a mutual understanding is an extremely specific list of requirements. The advantage of an outsourced company will be practising of Scrum methods and other agile methodologies. Scrum enables self-organized and transparent process which emphasizes interaction between developers and their customers. Without agile methods, project owners have to wait till the program is complete to know the results, while with them customer can regularly see the results and change it to the ever-evolving needs.

Find the cost of outsourcing app development for your company

One-third of all app development projects is handed to external teams from companies that focus on custom software development. This decision is always made depending on the skills and expertise that outsourced developers can offer. And the cost of building an app with an outsourced company is constantly asked by companies that start their way to the mobile market. If you want to identify the real cost of a particular project, you should tell developers about it. Depending on the requirements, needs, and what you want to achieve with a software solution the costs will vary. One of the factors that also influence the price of the outsourced development is a location of the development agency. Thus, app designers in North America and Europe can charge with $300 per hour, while some developers in Indonesia may take only $20 per hour. But preferring a low-cost development company, you risk to be left with nothing. A low-quality application not only loses the revenue and drops in conversion with users leaving it due to poor performance and user experience but also damages the brand reputation.

Get a free quote!

Among our clients can be found brilliant startups and 500 Fortune companies, but our services are also outsourced from all over the world. If you are bearing a creative idea for your application in mind and want to get a project estimation to define the budget, our IT consultant will be happy to assist you with it. Just tell us about the app goal and your requirements and get a free quote from a leading U.S. development team.