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Category: Blog Articles

How Much Does It Cost to Build an App?

Dec 26, 2013 Richard Sumner

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One of (if not) the most prohibitive hurdle to developing your own app is cost. First off, you have to make a concrete calculation weighing anticipated business gains against the cost outlay for development and support. According to many market research studies, including leading firms like Forrester, development costs are can represent only the tip of the iceberg. Once you take the time to spec out and build your dream app, you'll find little things that you could have done better; or U/I updates that would make it more intuitive; or Google released a new update to Android; or Apple changed the resolution on the newest generation of iPads. Whatever the case may be, more than 80% of IT personnel polled in 2012 by AnyPresence found that their firms were updating their apps at least twice per year. A third of the respondents were pushing new updates every month. Forrester estimates that only 35% of any app's lifetime cost is covered in initial development. This is a major stumbling block for many companies, and rightly so.

Apps are not an experiment that you can play around with and just see how the market responds. The future of enterprises is mobility and only companies that fully embrace and integrate mobile strategies effectively will thrive in this landscape in the months and years to come. So, swiging and missing on app development is unacceptable in the modern business atmosphere.

In addition to development representing but a portion of an app's full cost, most companies looking to work with a mobile solutions partner (or even app developer if you want more of a vendor/client relationship) don't know what type of cost ranges within which any given app could fall. There are a huge number of factors to consider, and every app is different in some way or another. As such, there are no perfect predictions to be had. However, we can provide you with some general cost brackets broken down by complexity and, therefore, required development effort.

At their most basic levels, apps come down to hours. Whatever feature you want, whatever U/I style you desire, whatever working relationship you want with your developer or parter will all affect the number of hours that a firm needs to complete the project. Some companies might quote their rates based on features you request, others might take your specifications and simply give you a flat cost amount, while others will just estimate the total number of hours required to complete the project, break that down by employee type, and give you a granular estimate that way. Regardless of the method employed, each company is making an internal calculation about how many hours they anticipate the project will require (based mostly on the feature requests and the complexity of any external hardware/software/API integration) and which resources that company will have to utilize to accomplish you goals. So, we can break down the cost buckets similarly.

Every feature your app incorporates equals a certain number of design, programming, project management, QA, and revision hours. The more features you request, the more hours required to deliver all of them, and the more the app will cost. The more complex the feature, the more hours required, and the more the app will cost. As such, the ideal working relationship with any vendor or partner is with someone willing and able to itemize each feature by the hours required to develop those features, cross referenced with the respective cost per resource hour. That way, you can obtain a granular overview of where the largest cost factors are. If your partner can do this for you, you can make informed decisions about which features are the most important or which features you might think about scrapping to save costs.

Most market research I've seen categorizes mobile app costs into three buckets:

Lower-level complexity, smaller feature list, generally one mobility platform: <$50,000
Medium-level complexity, medium-sized feature list, 1-2 mobility platform(s): $50,000 - $150,000
High-level complexity, large feature list, 3+ mobility platforms: $150,000+

The cutoff between the medium and high complexity buckets can vary some depending on the study at which you look, but it's generally $100K+ or $150K+. Being more realistic for an enterprise context, high-complexity mobile solutions will generally run $150,000+. But, this categorization might not clear much up if you don't know where your app falls in the spectrum to begin with.

For example, if you want to build an app that simply interfaces with your backend database, parses and analyzes that data, and then displays the information you want via a native tablet app on only one platform, that's a relatively simple app (assuming your back end is well designed and any legacy hardware or software isn't too hard to integrate into).

If you want to build a field sales application that supports offline data collection and caching, third-party hardware integration for a credit card reader, API support for payment and credit card security protocols, backend database integration, and social sharing? That's going to fall into the second bucket and run you anywhere from $50,001 to $149,999 based on how many total features you deem necessary.

If you decide to completely overhaul your CRM and you want to build a new solution from the ground up, including microphone and camera integration into the application, learning algorithms, backend integration, custom performance metric reporting, shareable and group editable files, individual device management, individual app management, individual logins, varying security protocol levels based on employee department, division, title and seniority, custom VPN requirements by device or by app, you're looking at a very complex application. Many of these things are absolutely necessary for your ultimate app, but you have to know that every feature you add, and as each of those features requires more and more expertise to deliver on, the higher into zone three you'll climb. That's not a bad thing by any stretch, because you're building a more comprehensive, safer and more useful solution. But as your solutions become better, it simply requires more to build them.

So long as you can find a mobile solutions partner with the discipline and forethought to forecast each feature by hour and resource on the front end, you'll be able to choose the features you can't live without and which features can wait for v2.

A word to the wise, though — even if you find such a firm and make the best choices for your business, always beware that support, updates and continual improvements often require far more capital than building the v1 of the app in the first place. Know that choosing to build a mobile app is a long-term investment to solidify your place within your target consumers' digital lives and stick to that mindset. It's not about the extra few dollars you spend now, but rather how can you build an integrated solution that will stand the test of time and generate business returns for years and years to come.

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