Why so expensive? Project Manager explains where does the real app development cost come from

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You have an innovative idea, the business plan and secured enough investment to provide the necessary funding for your next software solution, which you are sure will be a great success. Now you need a development team to implement your solution. After some research you notice three options: hiring in-house developers, gathering freelancers, or pairing with a software development company. You kinda lean to the latter but then you realize how much does it cost to make an app with a renowned software company. Why so expensive? Is outsourcing cost really that high? – you might ask. In this article, I’ll explain where does the real cost of developing an app come from. You might be surprised at how many additional services that money will buy you. 

You need to realise that when you consider a solution that gives you the best value for money, you must look for other crucial factors than just the pure cost of development hours. While hiring a software development company is rarely the cheapest option available, the return on investment is often higher – you get way more than just pure development.

How much does it cost to make an app when outsourcing software development?

I’ve already mentioned that when hiring a remote development team you shouldn’t just look at the numbers as it is more about long-term benefits. However, as the Product Owner/CEO/CTO you must think about how much does it cost to develop an app, and money is probably your main concern right now. That is why I decided to begin by presenting straightforward app development costs and the rough estimates for developing an app with help from a remote software development team from Poland. Outsourcing to Central and Eastern Europe is now generally considered as the choice with the best price/quality ratio.

When you check out custom software development companies on Clutch, which is a great platform with independent reviews, you’ll soon find out that an average hourly rate for a single software developer is somewhere between 25 and 100 dollars. A pretty healthy variation, isn’t it? Well, for the sake of our calculations, you can assume this (and SourceSeek’s development pricing reports confirm that):

When looking for custom software development, the average hourly rate for a mid-level developer is 40-45 dollars.

But that’s just a price for a single developer. And when you want to develop an app, hiring just one developer is VERY rarely the case. The final app development cost will equal the ‘hourly rate’ times ‘number of developers’ times ‘hours of work’.

So, now you have to answer two questions: how many software engineers do you need, and how long will it take to develop your app? As you can guess, the answers vary and depend very much on what kind of app you want to develop. Some time ago, the co-founder of The Software House, Marcin Mazurek, wrote a short post on the costs of developing an MVP mobile app. The general conclusion was that:

For developing a simple MVP application you’ll need somewhere between 20,000 and 30,000 dollars. And, I’d say that for proper custom software development it’s a minimal price. 

The more features you want, the more developers (as well as software testers, UX/UI designers, DevOps engineers, project managers, etc.) are needed and the more time it takes to develop your app.

Where does the real cost of developing an app come from?

So, app development costs are not low and investing in custom software development is not for everybody. However, when you want to upscale your business with digital transformation and you’ve got the money, I’ve got some good news for you:

When you decide on (top-notch) software development outsourcing, for the money you need to pay, you get MUCH MORE than just a working app.

What exactly? Well, that’s the most interesting thing. And the main topic of this blogpost.

💡 Read more: Why are Nordic companies falling in love with IT outsourcing?

You hire an already established team, not just a group of random developers

The difference between recruiting fresh in-house developers, hiring freelancers, and outsourcing to a software development agency is that the first two provide you with a group of people, while the last one gives you a team.

Those are people that know each other, have already cooperated together and know how to work with one another effectively. They have tried and tested processes, coherent development practices, code review procedures, communication methods and so on. You don’t have to worry about building a team from scratch, introducing developers to each other, learning how to work together and going through a painful storming phase – they all have this behind them!

The app development cost might be higher but what you’ll get in return is an already established strong team of people, ready to give you 100% of their performance from day one. This is crucial if you don’t have any time to spare and want to deliver a high-quality product on the market quickly.

💡 Read more: Building trust in a software team is a waste of time. Here’s what you should do instead

You get the skills and experience of a whole company

This point is overlooked far too often. Yes, you do get a dedicated team for your project but on the contrary to freelancers and in-house teams, they are not limited to themselves. When your freelancers get stuck with a problem, they’ll often google the answers – and there is nothing wrong with that.

However, software development teams already have various specialists in the house and share knowledge with each other. Your development team has access to other teams, their mentors, heads of departments, solution architects and more. Whenever they are stuck, all they need is to ask. And in a company (like ours) running concurrently more than 30 projects, there is a high chance that someone has already encountered a similar problem and can easily provide the best solution. No more time wasted on StackOverflow, we already have all the answers to solve any problem in-house.

Elasticity on-demand

Your needs and circumstances might change; we are aware of this and we are prepared for that. We are highly expandable to accommodate to your needs at any point in time. Do you need to add a specific specialist for just a quick improvement to help you with a particular problem? We will provide you with this.

We are also aware that the pace of development you need to change during different stages of your product implementation. Have you suddenly received a new deadline from your stakeholders? We can scale up and assign additional resources to your project within days. Are you suddenly going through hard times and need to cut your development budget? We can easily scale down, even to a bare minimum just to maintain your app. And whenever you are ready to work on your application again, we will be ready to scale up again to provide you with the pace of development you need.

No more predicting future demands, or constant hiring/firing processes. We know how important it is to be flexible, especially in the early phases of development. And we can scale up and down, whenever you need, on-demand.

💡 Read more: 5 software development outsourcing scenarios for CTOs

Solutions in all software development areas

Sometimes you need people specialising in multiple areas to build your applications, and we are ready to provide you with this.

In The Software House, we give you access to specialists in all domains you might need, not limiting you just to frontend and backend developers.

  • Do you need to rebuild your current infrastructure from scratch? We can easily engage our AWS Certified DevOps Team to help you with this, as well as to support your infrastructure and promptly solve all problems on your production environment 24/7. 
  • You want to make sure your users get the best experience possible? We have an experienced Product Design Team that can help you with all aspects, starting from research and user experience planning, through prototyping, to preparing beautiful UI interfaces for your application.
  • Need to make sure your solution is safe and resilient? Our QA departments can serve you with a wide range of services such as writing automated tests, performing security testing, performance testing and more.
  • Not sure if the application you are building satisfies the need of your customers? You can schedule workshops with our team of business analytics team to help you with defining the scope of your application.

Whether you need a specific specialist for long-term cooperation or for a quick improvement, we can provide you with that. And if you need uncommon, specialistic knowledge which we don’t have, we will happily acquire it and take this responsibility off your shoulders and find it ourselves. Our net of technological partners allows us to find people with the rarest of skills, so you don’t need to spend your time on this.

Our Research & Development team is constantly checking out new trends and creating new solutions with ready-to-use components for other teams. That means, no more searching for dozens of various people – it’s one business partner for all your demands.

The best project management practices

There is no such thing as a perfect project where everything goes smoothly without a single obstacle. Every project always involves plenty of risks; unexpected scenarios happen, conflicts in teams appear occasionally, etc.

Wouldn’t it be nice if you could sleep tight without worrying about such things happening in your projects? If you pair with a software development agency, you outsource these problems too.

Whenever we hit a problem we solve most of them without the need for you to engage in it. Of course, we will always keep you informed. Our project managers are trained and experienced in solving difficult situations, managing conflicts and finding adequate solutions in all circumstances. Apart from firefighting, they actively monitor your project, look for any potential risks, and plan ahead. No more sleepless nights! You will have everything monitored: we will update you regularly about potential risks and propositions on solving them, and if something unexpected happens you can expect us to handle it. So you can calmly focus on what’s the most important for you: growing your business. 

💡 Read more: IT project risk management: 7 most common software development risks

Business partner, not just a contractor

The truth is, software development agencies grow as fast as their clients do. Instead of blindly writing code, you can expect us to also help you with choosing the best and most effective solutions for your problems.

Sometimes you might think that technology X is indispensable but perhaps there is a better, more efficient and cheaper way? If that’s the case, we will spot it and propose it to you. Or if you realise that your users complain about a particular issue with the business logic of your app, we can also happily look for the best available solutions.

We actively search for potential improvements in both technical and business aspects. And while we never push for it – obviously, the final decision is yours – whenever we see a solution that might positively impact your business, we will bring it up. We want your business to strive as much as you do.

Commitment and safety

While you might think this one is obvious – you fund the project and expect full commitment from the other side – it doesn’t always happen. Especially with freelancers who not only often work on multiple projects at the same time, but legally they are private people working under the civil rights agreement. That means, they can disappear overnight and you might have problems tracking them down. And believe me, these things happen.

Don’t get me wrong, there are plenty of talented and responsible freelancers on the market but you can never be 100% sure that the ones you select won’t leave you halfway through the project if they get a better offer elsewhere. 

In the case of a software development company, that’s a different story. First of all, since we are a legal entity, your contract is automatically safer in all aspects, and we can’t simply disappear overnight. What’s more, for a software house like us, reputation is everything. Leaving our clients satisfied is our “be or not to be”. If we do a bad job, it’s gonna haunt us forever via bad reviews (and losing potential clients as a result). That is why we always give our full commitment to every single project we engage in. 

Check out our portfolio

Remote working tools included

Having the right people is not enough though. You have to provide them with the necessary tools. And it’s not only about buying your team computers.

Effective teams use effective tools, and these are often expensive. Apart from equipping our teams with Macbooks Pro, newest peripherals and multiple monitors to make sure they are never limited by the hardware they use, we also provide multiple software solutions, such as:

  • Jira Software for project planning, task management, and bug reporting.
  • Bitbucket for source control.
  • Confluence for documentation and knowledge management.
  • Slack Premium for unconstrained communication.
  • and many more!

And these are not cheap solutions. The monthly bill can add up to hundreds of dollars per month. But it’s yet another thing you don’t have to worry about because you get the whole suite of tools in the price of your team.

💡 Read more: How to manage a remote team: 10 tools to optimise your software outsourcing

So, what will the outsourcing cost of software development company buy you?

As you can see, outsourcing your development work to a software development company will get you more value than just development hours:

  • a team with already established routines and processes, so you can expect high performance from the very beginning.
  • the experience and skill set of the whole company and each person working there – even outside of your project.
  • scaling up and down on-demand, whenever you need, in all areas of software development.
  • managing teams and predicting risks are handled for you.
  • full commitment, a safe contract and a suite of all the necessary tools to deliver the project fast and with high quality.

And perhaps most importantly, you get a business partner, not just an outsourcer. So if you want to learn everything about benefits you get pairing with the software development agency, give us a shout. Consultations at The Software House are always free of charge!

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