Factors That Affect App Development Costs
The world has become more dependent on mobile devices and apps. There are close to seven billion smartphone users worldwide. That equates to almost seven billion mobile phones that can download and use mobile apps.
Business owners are aware of the importance of apps in their businesses. A growing number of brands are building enterprise apps to help them enhance customer experience, increase brand loyalty, boost retention, and reach new markets.
If you plan to do the same, consider obtaining IT project advisory. An experienced IT consultant can evaluate project fit and alignment with your business objectives. They can take charge of strategy and the project brief, which is crucial before deciding on project scope, timelines and cost.
The app development cost is one of the primary constraints in app development projects. Your IT project advisor’s guidance is critical when deciding on an appropriate budget.
Typically, app development costs tens to hundreds of thousands of dollars. Mobile apps with basic functionality cost from $16,000 to twice that amount. Meanwhile, the development price tag of a complex app is typically $70,000 and up and may even breach the million-dollar mark.
App development costs are highly variable because they depend on various factors. This is why the correct strategy can help you minimize costs and maximize the value of your expenditure.
The following are some of the factors you must consider when building an app.
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Who Develops the App
The cost of developing an app varies widely. The price depends mainly on who makes it.
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Template App
You can buy a template app, hire a freelancer to customize the app or do the customization yourself. Licenses cost a few hundred dollars.
Standing out is difficult with this option, so it may not be the best for an app meant for the mass market. Since you are buying a templated app, you will find many apps that look or function like yours. Besides learning the app’s code, you or your chosen freelancer may need to deal with the template’s bugs.
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App Development Company
Hiring an app development company is the most expensive option, especially if you hire a highly reputable one. Rates can be $500 or more per hour.
This estimated rate pays for an entire app development team. That includes developers, designers, and a project manager who will liaise with you or your designated project advisor.
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In-House Developers
If you hire developers in-house, you can reduce your app development cost. At a base annual salary of $108,000 per developer, you’ll pay a lower hourly rate on app development compared to what an outside app development company will charge you.
That said, hiring an in-house team comes with fixed costs. Your development team members will need space in the office, and add to the utilities and consumables burden. Hiring in-house also comes with opportunity costs; what will your developers do after they complete your app?
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Freelancers
Working with freelancers can save you money. You’ll pay only for the people working on your app, not a whole team. Depending on where you look, a freelance developer can cost around $50 per hour.
On the downside, working with freelancers means having no project manager to ensure everything aligns with your requirements. Plus, if you hire several freelancers, you will have a group of remotely distributed strangers working as a team; this means a higher risk of miscommunication.
There is also little to no guarantee of accountability when working with freelancers. You assume all the risks and hope you’ll get a functional app at the end of your development timeframe.
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Outsourced App Development Team
Working with an offshore outsourcing services company may be a better option. It can build you a managed and dedicated app development team.
You will pay just a fraction of the typical in-house app development cost in the right offshore location. The developer base salary in North America is $108,000 annually, but it can be only $25,188 in popular offshore destinations.
With flexible outsourcing terms, you can stop outsourcing when the project ends. This ensures you won’t have the fixed recurring costs (e.g., rent, utilities, consumables, etc.) associated with maintaining an in-house app development team.
Outsourcing to an outsourcing vendor also ensures accountability and quality. Your outsourcing partner assumes responsibility for your dedicated outsourced app development team’s output.
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App Features
An app with a single use and function will naturally cost less to make than a multi-feature and complex app.
An ingredients supplier company can create a simple product catalog and ordering app. It is a comprehensive repository of all the company’s ingredients, classified into categories, such as organic flavors, plant-based solutions, meat ingredients, etc. It is a straightforward app; it makes updating the catalog simple for the business and seeing what’s available easy for the customers.
However, what if the company decides on a full-featured product ordering system? The app would no longer be an easily updated product catalog. It would have purchase functionality linked to an inventory management system. It would have automated shipment, carrier management, customer engagement, and last-mile intelligence features built in.
The app would certainly provide richer customer experiences and readily yield business data. However, it would also cost a lot more to make.
An IT project advisor’s input is crucial when deciding on the type and features of an app. With their help, you can avoid adding unnecessary features.
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Platform
Android and Apple are two of the biggest platforms for mobile devices. Entrepreneurs are often advised to build an app for one platform first to keep costs low.
Between the two, Apple apps are quicker and cheaper to develop. Android apps take two to three times as long.
Apple device owners also tend to spend more time and money using their iPads and iPhones than Android owners. As a result, some businesses prefer launching their apps on iOS first. Once the app is thriving on the Apple App Store, they expand to other platforms.
That said, it must be noted that more people use Android. Entrepreneurs who wish to promote their businesses to a broader market or audience may want to start with Android instead.
Other Considerations
Besides the basic features, the platform, and the person or team you hire to develop your app, you will also need to consider aspects such as optimizing your app, marketing it, upgrading its features, and providing support to users. You must allocate additional funds to promote and maintain your app.
Estimating the Cost of Mobile App Development
Many factors influence app development costs. The app features, the platform and development resources are some of them.
However, before you get down to the nitty-gritty of specific costing, make sure the app makes business sense and is aligned with your goals. Additionally, you must decide on your app’s features and how to procure the human resources and technology you need for the project.
This is why you need an IT project advisor. After all, while minimizing costs is important, ensuring your app development project will genuinely add value to your business operations is critical.
AUTHOR BIO
Ratheesh C. Ravindranathan is the Managing Partner at Affility, a comprehensive advisory services firm assisting clients in the UAE and worldwide with IT, risk and management consulting solutions. Being a specialist FinTech professional with over 20 years of experience, an MBA in Information Systems Management, Oracle Certified Professional (OCP) and a Certified Information Systems Auditor (CISA), Ratheesh is an expert at guiding through your business’s digital transformation journey, Independent ERP Advisory, and Transaction Advisory for various M&As in this region.
