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You might have heard of the term “business outsourcing”. This is when a business hires a third party to serve its client/customers. Before we begin a discussion on outsourcing mobile app development, let’s discuss outsourcing in general.
Here is a textbook definition of outsourcing:
“Outsourcing is a business practice of hiring a party outside the Company to perform services or create products which are generally the task of the Company’s in-house employees/staff.”Investopedia.com
Outsourcing is a profitable technique by which two companies can partner up to serve a common goal. For example, a large corporation will partner with a smaller firm to serve a portion of a business, like team-hiring or Human Resource. This way the larger corporation enjoys repute and cost-saving, and the third-party or outsourcing company, benefits from business growth through serving clients.
Moving on, in 2019 there were over 4.2 billion internet users, out of which about 50% accessed the internet only through mobile. Interestingly, there are over 2.7 billion smartphone users around the globe to reach that percentage. Hence, claiming that mobile app development is a thriving industry should not be surprising. In fact, we believe it will continue to grow beyond 2020.
In IT, networking and software, outsourcing is a popular way by which software companies provide services. Through app creation software and resources, outsourcing app development companies have shortened the time frame for marketing, decreased total expenditure and have yielded quality products. Hence, when Statista reported that around 52.5% of the IT companies resort to outsourcing mobile app development, it is simply because of the worthwhile business opportunity it offers.
Hence, we will be discussing how outsourcing mobile app development is great for business and how you can hire mobile developers to create your product.
How Is Outsourcing App Development Beneficial?
Thanks to the increasing number of users connecting to the Internet, collaboration, communication, and spread of information has become a snap. Looking at the recent statistics, IT-related services, including developing an app, etc, have produced an estimated profit of $180 billion in revenue up till now.
Moreover, the very customer-focused nature of Agile and Lean development methodologies enable mobile app development companies to build unique designs. Web app designs have become fundamental because 89% of consumers would rather switch to a competitor app after just a single poor experience.
These figures prove the need for businesses of all sizes to stay up-to-date with changing trends in digitization. To cater to these growing demands, outsourcing software development methods have come forward as a bright solution. The practice is cost-effective and provides a good return on investment (ROI).
The reason is quite logical as well!
Outsourcing offers an extensive range of skills and experience, more than when mobile app development companies hire in-house teams. Let’s discuss this in detail:
The speed of delivery is the foremost benefit of outsourcing app development. When you hire a mobile app development company, you are also inviting its project managers and business analysts. A whole company will work on your product, ensuring timely delivery to build a prominent client relationship.
With in-house teams, companies often segregate projects according to urgency, priority and other factors. Thus, in-house app development can take a long time for completion.
Bigger Pool of Talent
In-house app development can have its benefits. Yet, if you focus on the pool of talent then outsourcing is the way to go. With outsourcing app development, you have access to a wide variety of developers’ intellect and approach to challenges. Extrapolating this thought, software developers available in different regions like Canada, Malaysia, and China will all offer differing talent pools. Hence, you can leverage a greater technique and mindset for your projects.
Similarly, you can also choose to outsource iOS and Android development to a single mobile app development company. Outsourcing companies typically hire both, native and hybrid app developers, for platforms like Windows, Android and iOS. In-house teams would instead search for all-in-one options, which might not always be the best.
Whether your mobile app development project is a one-off or a continuing plan, outsourcing tasks by hiring app developers can be a feasible solution, regardless. If you think hiring app developers from Europe is cheap, then you will be surprised to discover how much it costs to hire someone to build a website from South Asia or Canada.
On the other hand, with in-house hiring, you will need to invest in a team of developers and the technology they need. The overall cost of hiring employees is not one-off either, it is a monthly recurring process, including workspace and equipment maintenance cost. Instead, a feasible alternative is hiring mobile app development agencies who charge according to agreed plans (discussion ahead!).
Top Strategy for Hiring Mobile App Developers
1) Identify Business Function
If you are choosing to outsource mobile app development, a solid plan is necessary for this venture. Start by identifying functions that require outsourcing. Traditionally, there are three:
- application development,
- system integration, and
- database management.
No matter what sector you choose, you should define how the outsourcing developers can function on this project.
Perhaps the option to choose freelance app developers on Behance and Upwork might raise your interest. Even so, the general idea to focus to highlight a business function remains and so does the need to first build a solid outline.
2) Identify Business Model
There are three main models of outsourcing business development. You should be aware of how outsourcing companies function. The following is a quick onlook:
I) Onsite Model
A team of skilled outsourcing app developers are present on the client’s premises. The two parties work closely with direct communication with each other. In this model, implementing project changes is easier as compared to other models.
This is similar to the client choosing an out-staff model for outsourcing. In this case, the client is responsible for managing teams, their working times and, in some cases, salaries. As for the mobile app development company, they would only allot manpower to their client.
II) Offsite Model
The software team resides near to the client’s location. This location can be within the same locality, region, or even state/province. The logic is to be in closer proximity to the client than in the offshore model. The software team has a more ‘free-hit’ role since the project requirements are not comprehensively defined. The development team can discuss to decide what is best for the client.
III) Offshore Model
This is when the outsourcing team is neither staying with the client nor near them. Instead, this project team is situated in a different country or global region. Such teams require complete details of the project before they begin. Since offshore outsourcing teams can even be continents away from the client, the best methods of communication are through emails, phones and video calls.
3) Identify the Service Model
I) Staff Augmentation
To hire mobile app developers temporarily to augment the capacity of your organization; this is staff augmentation. The range of reasons due to which companies may choose is:
- To increase workforce capacity
- Form a bridge until permanent hiring takes place
- To gain specialized skills
- For strategic reasons, where the team is flexible and gives a competitive advantage.
Staff augmentation is so prevalent that the staffing industry generated $490 billion worldwide in 2018. It is the simplest form of outsourcing where outsourcing providers hand out tasks to software teams along with a place of work. Software developers will ensure that teams report working on time and their salaries. However, the client will look over their job responsibilities and other aspects like hiring/firing, team building and other activities.
II) Dedicated Teams
A dedicated team is a remote team of another company working on your project. This is different from staff augmentation model because here the team is entirely working under the client. The model is best for long-term projects where app development requirements are unclear and change as the project proceeds.
In this model, mobile app developers will work exclusively with you, the client, in a direct reporting style. The outsourcing company will play an assisting role here.
Hiring app developers through this model will enable you to have a more hands-on experience, unlike other models. You will be able to monitor daily activities, interact with the entire team, look at overall progress and project management in detail.
III) Project Based
A project-based team model is another option. Here, the outsourcing software company takes full responsibility for delivering products. You, in return, have to provide complete details of the project for developing an app. In general, the client will only judge the final product and its cost, not the entire mobile app development process. In this model, deadlines, team members and experience, and a fixed budget are key factors.
4) Build a Budget
As with all business plans, mobile app development outsourcing projects also factor costing and budget. The client and app development company should form a budget for business plans that will determine options available for developing an app. Whether a client is looking for cheap app developers, in-house developers, or freelance app developers, the budget is a key factor.
You can choose between readymade models through app creation software, or select a custom-built solution. Both of these solutions have varying price tags, the latter having a wider range. Off-the-shelf or readymade mobile apps are by far the cheapest, but they also lack personalization. Generally, they do not stand out from the crowd and if you are looking for something special, it is better to explore custom options.
Custom solutions, or bespoke solutions, are perfectly fitted according to the client’s needs and usage. Some factors that influence the budget are:
- What kind of technology will the app use?
- What features are going to be in the app?
- How many developers will work?
- What is the launch date?
- How secure should the app be?
While we will discuss the question “how much does it cost to start an app” in detail in the coming section, a fair estimate right now would be anywhere between USD 5,000 to USD 500,000. It all depends on the complexity of the mobile app itself and its implementation.
Remember! There is a huge misconception among clients regarding freelance app developers and mobile app development companies. The difference in pricing is not always so significant, and even if it is, an app development company would justify additional costs. Hence, it is possible to hire cheap mobile app developers who will fit according to your budget.
5) Research Mobile App Development Companies
You have selected your service model and built a budget and gathered resources. Now you only need to hire a mobile app development company.
To make sure you hire the best in business, we recommend you research at least six companies after sifting through several more. Start by looking at right platforms. Business platforms like GoodFirms, Clutch, LinkedIn and others like Behance and Dribbble are great to check out company portfolios.
Conduct an organic online search and try going through a plethora of outsourcing companies. Start with a list of at least 15 well-chosen candidates. Make a record on a spreadsheet for comparatives. Apart from recording the name and location of the company, you should also record:
- Their pricing plans,
- Their solution to your app development needs,
- Your remarks about the mobile app development companies, and
- The time they will take to present their solution.
Don’t forget to watch reviews when hiring app developers. Outsourcing companies strongly market their portfolio along with reviews for reputation. Try speaking with reviewers away from the platform to get in-depth information about the development company.
6) Mode of Payment
Three modes of payments are popular in outsourcing app development:
- Payment for outsourced staff.
- Payment for a fixed price after project completion.
- “Pay as You Go” method based on the Time and Material policy.
In staff augmentation, you will pay the individual salary of the team you will procure from the mobile app development company. This would be like paying for your employees, nothing too complex.
The fixed price model is something that you would want in a small project, typically when developing a Minimum Viable Product (MVP). You and the app developers will agree on a fixed cost, plan and time for the product, and will pay according to the set timeline. This method is ideal for startups that are just starting their online business. A small, yet, scalable and working model of their application will enable them to market the potential of their product and build up as they progress.
The Time and Material model is one of the most famous payment modes among software companies. This model typically works best in Agile development processes. Due to the iterative nature of the process, where improvements and features are added as per client/user requirements, companies develop a Pay as You Go system. In this system, the complete cost of a product is hard to determine as more changes fall into the scope of the project. Hence, clients pay when they need adjustments or additions.
Cost Of Outsourcing Mobile App Development Project
As we discussed earlier, the cost of outsourcing mobile app development depends on several key factors. These include:
- Vendor location and type
- The complexity of the App and its features
- The backend infrastructure along with APIs
- The front end design along with UI/UX
- Cost of branding
- Number of platforms to aim for (Android, iOS, Windows)
GoodFirms, a popular B2B website for business listing and gaining clients, recently released its findings on the cost of mobile app development. According to the platform:
- A feature-rich application like Instagram and Uber can typically cost between $70,000 or above.
- A mobile application with medium complexity can cost between $60,000 to $70,000.
- An application with minimum features and lease functionality can cost up to $60,000.
As you can notice, features are the main driver of the cost of a mobile application. A feature is a special activity that software must perform and return the desired value. This can be anything, from the advanced biometric fingerprint scans or retinal scans to common ones like a simple password login. The number of features and their complexity correlates to the cost of building a mobile application. This adds to the time of building applications. Hence, a simple cost estimation equation can be:
Cost of Mobile App = Total Development Time x Hourly Rate of Developers
During the discussion phase of your mobile app development, developers will use this method to give a quick and rough estimate of the development cost. They will then add factors like technical requirements, business plans and the overall project description to make the quote accurate.
Outsourcing mobile app development might seem risky, but quality control steps (as discussed above) can ensure you have an outstanding experience. Ultimately, outsourcing is dependent on the type of team you hire. Whether you take in-house development or choose between freelance app developers or mobile app development companies, your choice will determine your experience. The choice of your app will most likely lie somewhere in the following types:
- Basic Apps
- Authentication Apps
- Social Media Apps
- On-Demand Services Apps
- eCommerce Apps
- IoT & Data Collecting Apps
- Marketplace Apps
Remember! Budget and the cost of application are some of the important factors to determine before outsourcing development projects. However, the foremost factor should be the quality and expertise of the development team.
Hire a team that can transform your vision into a digital reality!