Mobile applications are becoming the norm, with more companies than ever setting out to get their own mobile app. But do these companies know their real mobile app development costs? Because of the popularity, many companies forget that developing an app can be expensive. It actually depends on how you allocate the resources to develop the app. Do you outsource your application development to a mobile application firm, utilize internal resources, or hire them? This seems to be the dilemma faced by several companies as they start to plan the launch of their own apps.
In a State of Enterprise Mobility Survey, 56 percent of mobile leaders surveyed say it takes from 7 months to over 1 year to build one app. 18 percent of them say they spend from $500,000 to over $1,000,000 per app. 50 percent of CIOs think the process takes too long; 24 percent of which cite it as a source of frustration.
Some CIOs make the call to hire in-house resources to develop the apps. The salary of a mobile app developer can be anywhere from $80,000 to $100,000 a year. This is rising every year due to increase in demand. Some companies make the mistake of thinking that they can hire one person to do it all. However, the mobile app development process requires a full-time team that may include a designer, tech lead, developer and quality assurance specialist. Not all mobile app requirements are the same, but if you factor in all of these positions, you get the picture.
[quote]Only 26 percent of organizations are adopting an in-house-only development approach, while 55 percent are successfully delivering apps using mixed sourcing.[/quote]
Why do Enterprises Struggle to Build and Maintain Apps In-House?
In a study by Gartner, it found that the majority of organizations have developed and released fewer than 10 apps, with a significant number of respondents not having released any mobile apps at all. A separate study showed that 45 percent of large enterprises struggle to deliver mobile apps. There are a number of contributing factors to why enterprises are struggling to produce apps in-house.
Demand vs. Supply
Demand is far-surpassing an organization’s ability to supply the resources to meet the demand. The pressures experienced by companies to comply with apps for numerous business objectives can’t be met due to the strain on resources to provide these services.
Being proactively competitive is a challenge when there is a pressure to comply with limited resources. As a result, companies are forced to take a reactive approach when developing apps. Pressure to create an app at this speedy rate forces a company to eliminate certain aspects of its business strategy. The app development strategy needs to make sense both in the short-term and long-term.
Pressure on Time to Market
The demand on companies to develop apps is an increasing issue with 85 percent of companies having a mobile backlog of between one and 20 applications, with half (50 percent) having a backlog of between 10 and 20 apps. The time it takes to get an app to market also causes pressure, with an average time of three and six months to build and deliver a complete mobile application – that is depending on the size of your development team.
Lack of Resources
94 percent of organizations don’t have the necessary mobile development staff to meet the enterprise’s demand for apps. Building apps for both Android and iOS requires two different coding languages and two different skill sets. Not to mention, if you were to hire an app development team – mobile designer, developer(s), project manager and quality assurance manager – the wages and benefits of having in it place can be costly.
Finding an experienced app developer/team is a challenge, and the limited supply makes it even harder. The shortage of key talent is making it increasingly hard, especially for enterprises interested in growing an in-house app development team.
What to Look for in an App Developer?
Look for a developer who has an interest in your business and industry. If you are a telco, make sure that the developer has experience working with similar telcos in your industry. Review their portfolio and ask for client references.
What platforms will your apps run on – Apple? Android? Different platforms require a different coding skill set. Does the developer have experience in front end development as well as programming language such as Objective C (Apple) or Java (Android)?
Coding is important, but UX and functional design are equally as important. Check out their existing apps to see what they are like. Do you like the design, functionality and how easy the apps are to use?
What skill set do you require – UX, design, analytics, development, project manager, and what is benefit of hiring in-house or freelance vs. a team of experts with experience in each area.
Success of Existing Apps
Check out their existing apps and find out how successful they are. Are they rated? Do they have any reviews? How do you like using them?
So, What About Outsourcing?
Outsourcing projects also has its challenges. Hiring off-shore developers in the traditional outsource power-houses like India or China no longer offer the big cost savings that they did once upon a time. In fact, 62 percent of offshore IT contracts cost much more than businesses expected, with 27 percent stating that costs were significantly higher. Traditional outsourcing does not reduce your mobile app development costs as much as you may have initially thought.
In addition to costs, outsourcing comes with other challenges of managing workers in different time zones; including the time difference and communication lag, culture barriers, as well as managing the quality of code that can also be an issue when working with outsourcing.
Introducing Hybrid Nearshoring – the Best of Both Worlds
Venice Consulting Group’s Hybrid Nearshore Model allows you the benefits of offshoring much of the web and application development process while negating the risk; combining the best of both worlds and providing your business with four immediate concrete benefits.
Four Ways the Hybrid Nearshore Model Can Benefit Your Business
1. Less Pain
Anyone who’s worked with teams on the other side of the globe understands the pain of conducting conference calls at night. With the Hybrid Nearshore Model, working in the same time zone does away with night calls and dramatically speeds up email communications to same-day responses. You can also avoid broken video conferencing due to the long distances between the teams.
2. Reduced Costs
Using VCG’s Hybrid Nearshore Model, businesses may save up to 50 percent compared to US rates. One of the primary advantages that offshore firms provide is a dramatically reduced rate structure when compared with US-based resources. In practice, many people find the true cost of the project to be much higher when travel expenses, midnight conference calls, and re-work arising from missed requirements are factored in. When these are included, VCG’s Hybrid Nearshore Model can significantly lower your mobile app development costs by comparison.
3. Eliminated Risks
Do away with the risks of traditional outsourcing. Our Hybrid Nearshore Model works in the US time zones, with teams a short and inexpensive flight away when face-to-face meetings are needed. Also all members are fully fluent in English, eliminating any stress with language barriers. Reduced risks equals piece of mind for you.
4. Minimized Frustration
Differences in culture can lead to misunderstandings that negatively impact your deliverables. Certain business cultures avoid confrontation by agreeing to everything while masking over problems, leading to missed milestones and increased costs. The shared business culture with Hybrid Nearshore members means that everyone is communicating on the same page.
Reduce Your Mobile App Development Costs With VCG Hybrid Nearshoring
Developing a mobile app requires a breadth of knowledge and a varied skill set; one that is hard for a smaller company to have in-house without incurring excessive HR costs. Hiring a team of in-house app developers can also take time, time that is precious when developing an app. When you compare the costs associated with hiring a team of mobile app developers with that of outsourcing to a third party, hiring a third party is an attractive option for many. When you hire an agency to develop your mobile app, you will reap the benefits of their expertise and knowledge.
If you want to save on your mobile app development costs, but have questions about outsourcing your app development to a third party, consider VCG’s Hybrid Nearshore Model. VCG provides clients with a very transparent development planning and deployment process, delivering high-value through its design and low-risk cost-saving Hybrid Nearshore approach. For more information on Nearshoring, check out our Infographic: Nearshore Outsourcing 101: The Better Option for North American Organizations.
If you want to learn more about how VCG used the Hybrid Nearshore approach to build an innovative and successful app, download our case study. If you’re interested in cutting down on your mobile app development costs, and becoming another one of our happy clients, contact an expert today.