Why Cheap App Development Will Actually Cost You More: Risks to Consider and Lessons to Learn

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It is common practice for business owners to base their decision solely on the price when choosing between software development vendors. The promise of a higher quality product together with a lower price will certainly raise some eyebrows. Regardless of this fact, many business owners take the bait, and eventually decide to go with the cheapest provider.

The thing is, the project which is initially priced low in many cases goes 2-3 times over budget, misses all possible deadlines, or turns out unviable due to poor quality and multiple bugs. Thus, there is a huge difference between the initial price and the final cost of app development.

Low cost app development is a slippery slope. If you are still considering it as an option, there are several factors you need to take into account.

In this article, we will explain how much cheap app development can actually cost you in the long run, and why it makes sense not to choose software development companies based solely on the initial price.

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What is the price you will have to pay for cheap app development services?

Cheap mobile app development usually comes at a cost. Thus, when choosing a provider with a seemingly affordable offer, you need to understand what you will need to sacrifice.

There are several ways providers can cut the cost of app development:

  • By locating their development facilities offshore to India or Pakistan. Despite affordable rates, the level of education, skills, and corporate culture among such providers are usually quite low.

 

Learn about the main types of outsourcing and the difference between offshore and nearshore outsourcing.

 

  • By underestimating the development scope and effort (on purpose). Such estimates usually don’t cover any risks or project management hours.

 

Read more about the art and science of software development estimation:

How to Validate a Proposal Given by a Software Development Company?

 

  • By offering a lower rate or a special discount just to score the contract. The chances are, there will be hidden fees or upcharges once you start working.
  • By offering inexperienced junior-level developers or interns who are just gaining experience. As a result, such teams won’t be able to deliver on time, and the quality of the product will be significantly lower in the end.
  • By offering a “one size fits all” service. This usually includes cloned apps, built on top of DIY app builders or white-label solutions. As a result, your product will lack the innovative edge and won’t be able to stand out among the competition.

 

Insights from our CEO: Why every startup needs custom software development?

 

  • By assigning developers/designers/project managers to several projects at the same time. This means, the team won’t be able to focus on your project, which typically leads to lower commitment and poor results.

 

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The main pitfalls of choosing low cost app development: The total cost of ownership definition

When choosing cheap app development companies, you will most likely face additional expenses later in the process. Additional costs may come in different forms.

This might be:

  • Missed deadlines and the vendor’s inability to deliver the product on time. As a result, you can lose a competitive edge and miss the opportunity to launch the product before other market players do.
  • The vendor’s failure to build the product at all. In this case, you will need to look for another company to take on the project halfway through and will have to ensure a smooth transition from one development team to another.
  • Quality issues discovered at the post production stage. Post production bug fixing, if not included to the initial estimates, may add up to 80% onto the development time. For you, this means not only greater development costs, but also losing active clients and gaining negative market perception which is difficult to recover.
  • The product’s inability to scale. Ignoring the basic software architecture, i.e. the foundation of the product’s scalability, you might be able to reduce the cost of the development. Yet, this will limit its future scope and ability to scale both vertically and horizontally. Every new feature will require significant changes to architecture or even a complete codebase refactoring. Consequently, failing to implement proper initial architecture can lead to development times of up to 10 times more than the initial project estimate.

While some of the listed pitfalls are not directly related to the price of software development, all of them usually translate into monetary value, e.g. additional expenses related to building and running software, or can lead to revenue loss afterwards. This means higher application’s total cost of ownership.

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The Total Cost of Ownership (TCO) is the sum of all direct and indirect expenses related to the software development and operation. According to Gartner, TCO includes “hardware and software acquisition, management and support, communications, end-user expenses and the opportunity cost of downtime, training and other productivity losses.

For example, the TCO of a car will include repairs, tech maintenance, insurance, and fuel, in addition to the initial price you pay for the vehicle.

Similarly, the total cost of ownership in software development will cover not just the cost of building the app, but also its maintenance and support, infrastructure and data management, changes and growth, staff training, etc.

Thus, cheap mobile app development often turns out to be a costly undertaking. Just think about it, would you rather buy a very cheap and unreliable car or one that is a bit more expensive and with a higher reliability rating?

Regardless of the base price of each vehicle, their performance, safety, service, maintenance costs (its frequency and amount) will differ. Moreover, the latter will most likely serve you longer. This makes buying a more expensive car a reasonable investment. Its total cost of ownership can eventually be much lower than the TCO of the cheaper alternative which will require more investments down the road.

Understanding the cost of app development: App features that are usually priced high

How much does it cost to make an app? This is one of the questions we hear most often. Yet, it is also one of the most debatable ones. The answer is: it depends. There are dozens of aspects that can influence the cost of app development. There is also no such thing as the average cost of app development.

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One thing is for sure, there is no way you can build another Facebook, GrubHub, or Tinder within a month and for as much as $5000. For example, any of the following features can add a few more weeks or even months to the estimate:

  • custom UI and animations/microinteractions (e.g. social media apps, games)
  • any app that requires backend and database development.
  • in-app personalization involving machine learning and algorithms (e.g. eCommerce).
  • geolocation and real-time tracking (e.g. Uber-like apps)
  • third-party API integration (depending on the API documentation and features)
  • additional layers of security and data encryption (e.g. fintech and banking apps)
  • apps requiring a web portal for app administration (e.g. on-demand delivery apps)
  • payment gateways integration (e.g. eCommerce and retail apps)
  • hardware integration (e.g. IoT apps)
  • apps using VR/AR content. Such apps are considered extremely complex (plus, the required skills are currently in-demand) and that is why they cannot be cheap.
  • AI-based apps and chatbots (e.g. social media, messaging apps)

If you get a suspiciously low estimate for a project of a similar scale and complexity, run!

Even if your budget is limited, there are many ways to reduce app development costs. You can take time to plan thoroughly and clarify your requirements, start with an MVP development, choose a nearshore software development team (as a happy medium between offshore and local developers), and choose a vendor with a well-oiled process and professional management.

App development cost at Eastern Peak. Why choose us?

We occasionally get feedback that our initial estimates seem higher than those of some smaller companies and freelancers. We are always happy to take that criticism and will encourage our customers to talk to us and to think about the total value of the service and not only about the initial estimate.

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As experienced software developers, we know there are many factors that affect the final cost, many of which are not clearly visible at the earlier stages. While a wrongfully low or an overly optimistic estimate can seem like a good deal at first, it is most likely to cause unexpected downstream delays in development as the missing items emerge.

In this case, in addition to the extra time and money, there are the incremental operational costs, and delayed time to market, which in turn leads to lost revenue.

We at Eastern Peak employ experienced architects and senior product managers to make sure the important early decisions are correct. We only assign senior developers and always thoroughly test our software utilizing industry best practices at each and every stage of the development.

So for us, it’s the final cost that matters, not the initial estimate of the development efforts. And this is what we believe should matter most to our customers too.

If you want to get an estimate for your project, simply consult with our experts. Head to our Contact Us Form and we will be happy to answer any questions about app development costs, or discuss possible cooperation options.

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