startups · 22 Oct 2020 ·Clock11 min

How To Outsource Mobile App Development in 2020

Alex Melchenko

Alex Melchenko

Chief Operational Officer

application development outsourcing
Illustration by Amir Kerr

In the digital era, when smartphones have become almost an extension of the human body, mobile applications have taken a solid position in the business strategy of any company. An app no longer serves as a source of entertainment: today it’s a convenient tool that makes our life easier. 

Figures illustrate the demand much better than words: an average US user has 20 applications on their smartphones. What is more, people keep installing new apps: only 1% of smartphone users didn’t add a new app to their phone in Q3 2019. 

COVID-19 and quarantine restrictions have accelerated mobile app usage worldwide. Both Google Play and App Store have experienced an increased demand in the first three quarters of 2020. Moreover, users started to devote 40% more time to apps in Q2 2020, compared to Q2 2019.

With this, businesses don’t hesitate whether to create an app or not. The only remaining question is how to do it. Let’s examine all the available options.

In-house Department or Outsourcing 

A company can take two paths when creating a mobile application: deploy its own forces and set up an in-house department or outsource the app development. In both cases, the outcome is the same; however, the scope of the required resources varies significantly.

The in-house app development is a lot more power-hungry. It can be compared with launching a sub-branch: you set up space and purchase equipment for work, recruit IT-specialists and managers, work out the operations, and adjust them. All these activities require not only a lot of money but also plenty of time, putting your core operations at risk.  

Mobile app development outsourcing is a prudent way to pass the buck to a third-party vendor. Basically, your responsibility ends as soon as you agree on the technical specifications. Now another team or an individual developer has to worry about the smooth operation, adequate qualifications, and deadlines. 

Thus, companies that choose to outsource mobile application development merely hire professionals and let them do their job without interrupting their own daily business routine. Moreover, they even manage to cut costs, which is among the top benefits of outsourcing.

Benefits of Outsourcing App Development

Since we started to speak about the benefits, let’s dig deeper and learn why mobile app development outsourcing is the best option for any business:

Uninterrupted Workflow

65% of outsourcing vendors and buyers claim the ability to focus on core business functions as the main outsourcing advantage. 

When delegating the soft development to a vendor, you won’t sacrifice your corporate duties and meetings; therefore, the quality of your offered product will remain the same.

Talent and Expertise

With the increasing talent shortage, it’s a real challenge to hire a high-skilled IT specialist with narrow-field expertise. Typically, all the best candidates are already hired by mobile app outsourcing companies or tech giants like Facebook. 

Those who still manage to find talent in the labor market are likely to wildly overpay. Especially if we are talking about the US specialists, whose hourly rate is much higher compared to European, African, or Asian standards. 

world map.png
iOS/Android App Development Cost, Hourly Rates

Organizations that outsource mobile app development – either to freelancers or to development agencies have access to a whole pool of experienced professionals at a relatively low price. They can choose an already set-up team with expertise in the necessary field.

Cost-Efficiency

Outsourcing happens to be more prudent than in-house development in terms of spendings for several reasons:

  • No need to purchase equipment for new IT-specialists;
  • No need to rent additional workspace;
  • No need to hire and train employees, which includes not only IT-professionals’ salaries but also additional payments for HR.

All these expenditures make up a huge sum of money in the long-term. That’s why sometimes executives don’t realize the whole scope of costs in the beginning. When delegating the development, a business can find an option that fits its budget. The overall cost of outsourced app development for one platform (iOS or Android) may range from $20,000 to hundreds of thousands. 

Time Savings

Outsourcing app development implies that a vendor starts to work on your project immediately. In-house development, however, requires plenty of preparations. You have to allocate space and provide equipment, hire professionals and onboard them, align the team so that it works efficiently. All this may take several months. 

With mobile app development outsourcing, all these steps are eliminated: you set up a goal, discuss the idea of a future application, agree on the technology stack, and select suitable vendors. 

Risks of Outsourcing

It would be naive to believe that there are no risks to outsourcing. They are always involved when a company deals with a third-party vendor. In the case of outsourcing mobile app development, the risks are the following:

Possible Leak of Sensitive Data

Data is power; therefore, any business should take all the necessary measures to protect it. While dealing with mobile app developers, you will have to grant them access to your treasury and reveal some confidential information about you or your customers. To protect yourself, NDA should be signed during the initial stages.

Virtual Communication

Although virtual communication doesn’t seem like such a big problem anymore due to the COVID-19 lockdown, it could still pose problems. Video-conferences don’t allow you to build the same rapport as face-to-face meetings. Even business trips don’t always compensate. Therefore, if your vendor isn’t located in the same city, you should be ready for telecooperation. 

Different Time Zones

Since many clients seek more cost-effective solutions, they choose offshore vendors who offer professionalism at an affordable price. However, you will have to adjust to different time zones. For example, you may just wake up when a developer is already finishing their workday. The key is to find a solution that will suit everyone.

Cultural Code

Cultural background leaves its footprints on the way we speak, eat, and, of course, work. When dealing with vendors from a country with a totally different culture (like the Middle East or Asia), you need to be ready for some adjustments. The style of communication and doing business may differ. Try being understanding to ease the process for all parties.

What to Choose: Development Agencies or Freelancers

The IT-outsourcing market is rather rich: it’s filled with many vendors and single developers. In fact, the market is continuously growing, which leads to its further diversification. What does it mean for a business that wants to, let’s assume, outsource iOS app development? The organization has many options to select from. 

Typically, the alternatives are highlighted: a pool of freelancers, or professional agencies. Let’s examine each one separately.

Freelancers

A freelancer is a lonely knight who is roaming the outsourcing market on their own. Usually, it’s a specialist with rather narrow expertise who charges an hourly rate. In terms of cost, freelancers are typically cheaper than mobile app development agencies.

The expertise of freelancers is a controversial issue. On the one hand, there are many talented specialists out there. If you manage to find one, who is experienced in the field you need, consider yourself the jackpot winner. On the other hand, a single developer hardly has enough skills and knowledge to create a high-quality app. 

Development Agencies

An agency is a professional organization, which specializes in application development. This is usually considered the most reliable mobile development outsourcing option. An agency already boasts an aligned team of professionals with extensive expertise in various fields.

In other words, a client “buys” a team of developers (both iOS and Android), QA Engineers, UI/UX Designers, a Project Manager, and a Business Analyst. 

The advantage here is that there is no need for you to closely monitor the operations and the progress: the manager will do it for you. Moreover, the ultimate advantage is that no time will be wasted on selecting the right people for the team: the professionals already know how to work together. 

It’s vital to understand that the service comes at a higher cost than freelancers. However, with this price, a client also buys protection and transfers all the responsibilities for the quality to the vendor.

Let's compare these three options:

 Development AgenciesFreelancers
Pros
  • An assembled team of professionals;
  • High-level of organization and formalization;
  • Deep expertise in various fields.
  • Cheaper than most professional dev agencies;
  • A pool of talent to choose from.
Cons
  • The highest price;
  • Agencies can be less flexible in their work than freelancers.
  • Narrow expertise;
  • No client protection measures;
  • Communication issues due to different time zones may arise;
  • A single specialist may be insufficient.

6-Step Guide to Outsourcing

Those who have never dealt with delegating IT duties to a third-party vendor usually wonder how to outsource app development. With the number of details to consider, it may be confusing at first sight. That’s why we, at Orangesoft, have worked out a 5-step-guide:

Step 1. Identify the Requirements and the Budget 

Everything starts with a goal, and outsourcing isn’t an exception. The initial thing to determine is why your company needs an app. In other words, you should give an answer to what problems it will solve and what value it will drive. For this, you need to examine your company’s background and determine all the project details to exclude discrepancies in the future.

Related: How to Write an Effective Mobile App RFP [+Free Mobile App RFP Template]

Budgeting is another core aspect that should be on the agenda from the beginning. It may significantly limit the functionality or outsourcing options themselves.

Step 2. Pick the Right Development Option

Depending on the scope of your future application, some choices may not suit you. For example: 

  • If you want to outsource iOS development, you should look for specialists with experience and a deep understanding of the iOS operating system. 
  • In case your budget is very tight, you may not afford a development agency. 
  • Provided a future app is very complex and requires extensive customization; off-the-shelf solutions may not be on your list. 

The ultimate rule is to choose the option that guarantees you to receive a high-quality app within a set budget. 

Step 3. Search for Developers

It’s hardly possible to rely on Google search alone when searching for specialists who you are going to pay thousands of dollars. You need to make sure that you are dealing with professionals. For the sake of convenience, try turning to so-called talent marketplaces. 

If you seek a freelancer, Upwork and TopTal are sufficient platforms. There, you can learn about their expertise and check reviews from previous clients. 

As for an agency, Clutch is one of the best options. It offers more than 19,000 vendors dealing with mobile app development. Moreover, you can filter the search and find only those who specialize in the platform you are interested in.

Besides expertise, you should assess the developers in terms of geography. Why so? You will need to closely communicate; therefore, time zones need to be on the checklist. According to this parameter, the vendors can be divided into three groups:

  • Onshore you share the same country;
  • Nearshore in the best case, your countries border with each other; in the worst - you live on the same continent;
  • Offshore you are located far away from each other, and the time difference may be up to 8-10 hours.

While onshore vendors are obviously the perfect choice in terms of communication, they are usually the worst when it comes to prices. Offshore ones, on the contrary, offer affordable pricing but require some sacrifice as you will have to adjust the time of virtual meetings.

Step 4. Evaluate Their Expertise and Experience

There are several things to consider during an initial assessment of any developer. They are:

  • Portfolio – Look for similar projects. This will show you the real expertise in the field. We highlight practical experience over certificates since theoretical knowledge doesn’t guarantee successful implementation.
  • Technology Stack – Make sure that an individual specialist or a team has sufficient tech skills to implement the idea of your application. 
  • Reviews – Try reaching previous clients or merely surfing the net to find feedback about the work. You may find out some faults: for instance, a vendor is high-skilled but always misses the deadlines.
orangesoft on clutch.png
Choosing an app development company? Check Clutch for company reviews first!

Related: 9 Tips on How to Choose the Best App Development Company

Step 5. Select an Appropriate Service Model

Depending on the number of responsibilities and level of involvement, you can opt for one of three service models. They are:

  • Dedicated Team In this model, a client shares duties with an agency. The vendor provides a full-cycle team with a Project Manager and a Business Analyst. It ensures that the team fulfills the assigned tasks and is responsible for the quality, while the client is bound to decision-making.
  • Project-Based It’s the strictest model, as it implies a fixed budget and pre-assigned requirements that aren’t altered in the course of the project. Basically, a client provides technical specifications in the beginning and waits for the result at a set date.
  • Outstaff or Extended Team It implies hiring specialists and providing workspace for them. As the client is hiring specialists for specific tasks, they will be responsible for controlling the development process, work time, vacations, and salaries.

Step 6. Choose a Payment Model 

There are two widely-used payment models:

  1. Fixed price – It implies a fixed cost based on the predetermined technical specification and project scope. It's usually implemented for rather simple, small app developments, such as an MVP for a startup.
  2. Time&material – This model takes place when it’s hard to assess the amount of work or a client wants to adjust the app during the development without altering the contract. In such a case, the client pays as the process goes. The payment is based on the developers’ hourly rates, which are agreed upon in the beginning. 

How Much Does It Cost To Outsource App Development

Numerous factors shape the outsourced app development cost. The scope of the team, the technology stack, the functionality, and the design are taken into account. Therefore, a project should be fully assessed before a client can receive a quotation. 

Despite this, there are some established market trends. Mostly, they are motivated by the geographical difference in salaries. For example, a US-based Android developer gets $96,016 per annum or $8,000 per month, while the average monthly salary of an Android developer in Belarus is around $1,200. With this taken into account, it’s only logical that it’s cheaper to outsource app development to Eastern Europe or other regions with comparatively lower salaries. 

Related: How Much Does it Cost to Develop an App

Is Outsourcing Mobile App Development Worth It?

Outsourcing is a preferable option due to many reasons. You get a team of tech professionals at a relatively low price that will dedicate itself to the project while your employees keep focusing on core activities. Moreover, these specialists have deep expertise in the field.

Although finding the right vendor may seem like a challenge, in reality, it’s not. If you have a very limited budget and a simple app, try freelancers or off-the-shelf-solutions. However, if your project aims to make a difference and provide an added value to the core product, it’s better to deal with a development agency, which guarantees a team with sufficient skills, and a high-quality application as a result. We, at Orangesoft, offer all this and much more. Book a free consultation now!

We live in times when apps are a must rather than a luxury. A business that offers an app is far more accessible than the one that doesn’t. Consumers can learn about your product, make an order, or contact a support team just in a few clicks. All these deliver customer service of higher quality and make the brand stand out from the array of others. Don’t let your competitors win over your customers. Launch your app to reach them first!

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