If you’re considering developing a custom mobile application (app) for your business, you might be wondering what the cost is and how the cost is arrived to when budgeting. After reading this, you should have a better understanding of not only what to budget for, but also of the variables within the cost of building the app. I hope you can be a smarter buyer to mitigate any final bill surprises!
Software Development Life Cycle
The first step in calculating the cost of a mobile app is to understand the software development life cycle (SDLC), or the steps in between an idea for an app and releasing it to your users. Most of the expenses in building an app are accrued by the skilled labor it takes to build it, not software licensing costs, so understanding who’s involved and what they’re doing is vital to understanding the cost.
The following is a software development life cycle visualization that Coherent Solutions uses as a guide for outlining the steps of developing an app.
Vision – the business case is assessed and project goals are aligned. The cost associated with developing the vision are mostly opportunity costs for time spent building consensus with stakeholders and documenting the vision; however, a consulting company can be hired to help define the vision. This phase is driven by the sponsoring business stakeholder(s) that will be paying for the app.
Requirements & Architecture – essentially involves the technical translation of the vision onto paper. This is where the functional, non-functional and architectural definitions of the system are formalized. This phase is commonly overlooked and undervalued in cost, as it takes a skilled business analyst, a UI/UX professional and a software architect for the information to be properly documented and designed. There might be more process and people involved before the development stage than one might think, but it’s better to measure twice and cut once.
Development – it’s time to write the code for the app. This phase is when the team is typically at its largest, involving developers and QA professionals, with oversight from the team that delivered the Requirements & Architecture phase.
Acceptance & Deployment – the system’s final testing takes place and the app is launched to end users. This is where everything is tied together and “turned on”. This phase (re)involves the stakeholders for final acceptance and the deployment team.
Maintenance & Enhancement – this involves ongoing maintenance and enhancements of the system. An app is rarely fully baked after its first launch, so there are typically additional features that are added to bring more value to its users. Bug fixes also occur to ensure the app works well after its launch date.
Other professionals that you’ll need to have during the app’s entire SDLC are a project manager and a business stakeholder, whose time and opportunity costs must be accounted for.
Understanding the process and the various professionals involved throughout the SDLC helps to understand how the costs are occurred by the labor involved in building a mobile app. When assessing the cost, ask questions about how the time is spent across the phases.
Platform selection is a significant variable in determining the cost of the application. Most clients choose between native iOS, native Android or a cross-platform technology.
It’s best to make your platform decision based on the devices that your target market uses. The best ways to figure out the most common devices is by looking at any current web or application analytics, interviewing current customers and industry experts and researching competitors’ platform choices.
Costs of developing native iOS and Android applications are a lot closer than they used to be, although, Android still takes a bit longer to develop on average, which usually translates to slightly higher costs. If you decide to launch to both platforms simultaneously, you can expect to pay nearly double what you would pay to develop on a single platform. Some application assets may be shared to lower the cost but you will pay at least 75% more to launch two platforms than a single one.
If targeting multiple platforms, consider a cross-platform technology like Xamarin. While the advertised code reuse is stated as 75% (https://www.xamarin.com/platform), we have observed overall development cost savings closer to 40%, which is still far from trivial! The cost savings greatly outweigh any feature or performance sacrifices (said sacrifices have also become less and less prevalent as the platform has matured).
Mobile app development costs
Now that you understand the process, the duration of resource allocation and how platform choices influence the effort, you have more context when assessing the cost. Understand your internal loaded (salary per hour + insurance + computers, etc) rate or external consulting hourly loaded rate per hour and multiply by the number of hours required for your app.
Coherent Solutions estimates that a simple mobile app is typically developed in 7 weeks. A simple app could be described as an application with basic features typical of a mobile app without any integrations with other systems. The team composition would be 1-2 people, a developer and QA resource that perform all steps in the SDLC.
A medium complexity app would take an average of 16 weeks. This app has an average number of features typically seen on a mobile app and includes a few integrations with other systems. The team is larger and includes individuals with expertise within their specific SDLC function as outlined prior.
Enterprise-class mobile applications take an average of 26 weeks and are on par with apps that have many features and includes a lot of backend integrations performing complex tasks with a lot of data. This requires multiple experts across the SDLC that are fully dedicated to the project, especially during their step.
The cost of phase 1 can be 15% to 25% of the overall project cost. Making this investment upfront greatly mitigates cost and timeline overruns once the development phase is started. Phase 2 is the remainder of the build. Phase 3, not pictured due to numerous variables affecting cost, is typically 25% of the initial project’s cost year over year but can be up to 50% depending on the number of platforms, integrations, and additional functionality. At Coherent Solutions, the typical floor cost is $25,000 up to a typical ceiling of $250,000.
Steps within the SDLC, duration of the SDLC, complexity levels and platform choices all compose the cost of building an app. The earlier you understand these variables, the more prepared you’ll be to understand the opportunity and explicit costs, thus helping you to budget and manage stakeholder expectations. Ask your internal teams and/or vendors what to expect within each variable before signing off on the project. Despite the chaos and pressure you may be under when being a stakeholder in such a project, do your best to account for each step in the process and then compare it project over project to optimize your spend.
Chad has over 10 years of experience in the application development industry co-innovating with technology pioneers to increase market share. He does this by facilitating complex technology discussions and providing practical, risk-contained solutions to accelerate innovative roadmaps. His passion for what he does stems from his belief that building technology that solves problems, within the constraints of time and resources, is the ultimate expression of creativity. At home with his family, his passion is being an artist and the father of two active children. Chad has a Bachelors of Science in Design, Marketing, and Rhetoric from the University of Minnesota.