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Outsource App Development in 2020: How does it work?

Based on many aspects outsourcing app development costs can vary widely. Depending on such aspects as location, developers’ wage ranges, the complexity of an application can vary from $25,000 to $150.000. If you’re interested in a simple app, then the whole development will cost about $20,000 – $50,000. In the case of more complex solutions development costs vary $100.000 to $200.000.

Anahit Ghazaryan

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There is a misleading opinion that only startups and small companies outsource their products’ development, while the IT giants keep huge in-house development teams. The truth is as always between– outsourcing is great if you know how to do it smartly. 

Today even companies like Google or Airbus outsource their app development. Why? This we are going to discuss in the following article with all the details, pros, and cons, in case you want to know more regarding successful mobile solutions’ outsourcing processes. This all-included article is supposed to provide a short guide on how to outsource mobile application development successfully, following the best practices. 

The Short History of outsourcing 

The global competition between the companies forced the businesses to review their strategies, increase flexibility and creativity to stay afloat. This brought many to the concept of outsourcing, and in 1989 outsourcing became a business strategy. The first outsourced project was given to IBM by Eastman Kodak for designing and setting up the data center, as IT was out of Kodak’s main scope of activity. The first case of outsourcing was fixed, and the perception of business strategies were completely changed. 

Statistics 

Let’s leave the lyrics, and jump to numbers. According to the statistics, the global market of outsourced mobile development reached $88.9 billion this year. Deloitte report states that during the last year the market grew by 31%.  

The reason why outsourcing becomes more and more popular is simple: statistics show that mobile app development outsourcing cost cuts the expenses by up to 75%! So why 59% of companies prefer to outsource their solutions. 

Sure, it’s a good reason to think about outsourcing development strategy. 

In-house vs outsource development teams 

The coin has two sides, and the greatest dilemma for companies remains ‎the same – outsource or not outsource app development.‎ 

For this reason, let us clearly state all the pros and cons of choosing each ‎option – in-house or outsourced development teams.‎ 

Pros and cons of an in-house development team 

Pros 

The main benefits of keeping an in-house development team are: 

  • The team knows all the details of the business  
  • Full control of the overall process of development 

Cons: 

  • Hiring and keeping an in-house development team is more expensive (salaries plus space and equipment expenses) than hiring high-level professionals from all over the world. 
  • Fixed team means limited qualifications, including knowledge and experience 
  • Once the project is finished, you need to find work for the team, facing the thread of retention of best specialists. 
  • The physical presence of team members in the office can be tough: no one can guarantee the team members’ effective work together.  

Pros and cons of outsourcing mobile development approach 

Pros 

  • Cost-cutting 

The reason why outsourcing becomes more and more popular is simple: statistics show that mobile app development outsourcing cost cuts the expenses by up to 75%! Today it’s a fact smart outsourcing is a cost-effective approach as it decreases the total expenses a great deal, helping to redirect your savings into more important areas. 

  • Efficiency 

Best outsourcing companies focus on quality to stay afloat in the modern fast-paced tech world. The competency is great, so why they try to hire the best-qualified specialists, to have state-of-the-art equipment and deliver the highest possible quality, focusing on efficiency.  

  • Perfect team management 
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Smartly organized outsourcing companies have good and well-thought-out strategies and infrastructure for implementing different types of projects.  

Developed workflow management tools help teams to provide good business automation, the quality result on time. Therefore, teams are easily managed and high-level projects are provided.  

  • Security 

Besides a high-level quality production, there is also one aspect that must be taken into account, while developing a mobile application. Sure, it is security. In the case of business apps, this aspect is strictly required as in case of hacking or data loss the consequences can be vital. Here the mobility of outsourcing companies can be helpful. Non-discloser agreements along with all necessary legal documentation and of course rebust security mechanisms assure your project’s security from all sides. 

  • Always there 

Because of the time zone difference, the round clockwork is normal for outsourcing companies. While in-house teams work 5/7 days and 40 hours per week, outsourcing teams can work with the regime of 24/7. 

  • Maintenance and support period 

Maintenance and support services can be included in your contract. As a result, after the whole process of development is completed, the outsourcing team continues to support and maintain the project, continually bug fixing and providing updates whether it is an Android or iOS app. 

Software outsourcing models 

Software development outsourcing models are defined based on two main aspects – distance and client-service provider relationship. Interestingly, these two are not mutually exclusive. Moreover, they form the different types of engagements both sides can have.  

SO by location 

This model is defined by distance, depending on the outsourcing firm location compared with the clients’. 

The main location-based outsourcing models are: 

  • Onsite – when the professionals from the outsourcing company arrive at the client’s office and work as part of the client’s firm. 
  • Onshore – when the outsourcer company locates in the same country as the client, but outside its’ office. 
  • Nearshore – when outsourcing company locates in a neighboring or nearby country.  
  • Offshore – when outsourcing provider locates in distant countries (time zones). 
  • Multisource – when all options of location-based outsourcing are working together. This model is used primarily by huge corporations for the best results. 

SO by relationships 

This definition based outsourcing model is defined depending on client-service provider rights and responsibilities. There are three main submodels for the relationship-based outsourcing model: 

  • Staff – where the main responsibility lays on the client. The hiring of professionals from an outsourcing firm is done by a client. The complete owner of the project is a client.  
  • Managed Team – where there is a shared responsibility of the client and outsourcing company, based on agreements between the parties.  
  • Project-Based – where the main responsibility lays on the outsourcing service provider, based again, on agreements between the sides.  

Cost 

Based on many aspects outsourcing app development costs can vary widely. Depending on such aspects as location, developers’ wage ranges, the complexity of an application can vary from $25000 to $150000. If you’re interested in a simple app, then the whole development will cost about $20.000 – $50.000. In the case of more complex solutions development costs vary $100.000 to $200.000.  

As a short guide list, consider to look at the following price-list: 

  • Tinder-like dating apps – $80.000 to $200.000 
  • Whatsapp-like messanger apps – $50.000 – $130.000 
  • Social networking apps – $25000+ 
  • Uber-like taxi apps – $25.000 – $100.000 
  • Payment apps – $40.000 – $70.000 
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Best outsource location for your app 

So you’re on your way to hire an outsourcing company to develop your dream app. Here are the best locations to look at, while searching for a software development outsourcing company. Depending on locations, companies can be very different, depending on working style, management tools, time-zones, mentality, etc. 

North America – the most popular, however expensive location for outsourcing development. The hourly cost rate for senior developer varies from $78 – $125 

Latin America – One of the most popular outsourcing locations due to lower development costs. The hourly cost rate for senior developers varies from $32 – $65. 

Eastern Europe – One of the top IT hubs, as the location covers the post-Soviet Union countries, where engineering was highly developed. The hourly cost rate for senior developers varies from $30 – $59. 

South Asia: When speaking about South Asia outsourcing, India comes into mind first. Perhaps the cheapest rates for SO are in India, however, the quality of the services varies widely too. An hourly cost rate for the senior developer here varies from$24 – $33. 

South East Asia: The next greatest software outsourcing hub in the region is China, along with Vietnam, Malaysia, and Indonesia. In this region, you can find more than 10 million developers.  

Where to start 

In this article, we’ve tried to provide the most important aspects of smart software development outsourcing strategies.  

Let us complete the article with short advice for the best outsourcing experience for your project.  

· Prices are different, based on many aspects we’ve talked about. So don’t compare prices, just choose the service provider that meets your demands.  

· Have a plan: clear formulated goals are vital while working with an outsourcing company.  

· Communication and management tools are important! Communicate with the team regularly, using various solutions. 

· Agree on payment, before starting. Before starting a project all the necessary documentation and agreements must be signed. This will assure the client from unexpected and unpleasant surprises and build a trusted relationship between the parties, regulated by law.  

So here it is! Now you have all the necessary information for starting an outsourcing process with one of the best service providers you’ll choose.  

Do not hesitate to contact them, ask questions, and set goals. Think twice and act!!! Let’s outsource!

(Featured image by Free-Photos via Pixabay)

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Anahit Ghazaryan is a technology writer and software development consultant at Addevice , a mobile app development company. As an employee of a mobile app development company, I devote most of my time to researching mobile apps and startup trends to create educational content for the company's clients and develop the Addevice brand. Being able to share my knowledge with people looking for valuable information to learn more about app development motivates me and inspires me to create better content. It's a pleasure for me to make the digital world closer to people and work for a company that gives me an opportunity to develop professionally.