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Outsource App Development in 2020: How to Make It Work

26 min read

So, you’ve searched the market, come up with a unique app idea but don’t know where to move next?

Outsource App Development in 2020: How to Make It Work
How about following the path of Google and Boeing and outsource app development?

With the opportunities of the modern world, it’s not necessary to create your own mobile app development team. Many small to large businesses outsource mobile app development to avoid hiring problems and enjoy a seamless development process.

How do you make the right choice and avoid costly mistakes?

In case you are interested in knowing more about successful mobile application outsourcing, we prepared this guide explaining how to outsource app development and follow the best practices. Here is what you are going to learn:

  • the state of the market for mobile application outsourcing
  • why companies decide to outsource app development
  • main challenges of mobile development outsourcing + solutions
  • outsource app development models
  • locations to outsource mobile app development
  • 7-step outsource app development guide

Let’s discover how to outsource app development without losing time and money

Why Outsource Mobile App Development in 2020

In the modern world where it’s necessary to adapt to rapid changes, many companies decide to outsource key business processes. In 2018, the global market for outsourcing was estimated at $85.6 billion with the perspective of stable future growth.

A large part of generated revenue goes to IT outsourcing. Many companies decide to outsource app development to strengthen their digital presence. In fact, information technology outsourcing generated $66.5 billion in 2019 as compared to business processes outsourcing, which brought only $26 billion.

There are a lot of reasons why businesses choose to outsource mobile app development instead of building their own development teams. Research indicates that reduced costs are among the main reasons for outsourcing in mobile app development. Staffing company OnContracting estimates that businesses can save an average of $100,000 every year by simply deciding to outsource app development.

Main Reasons for Mobile Application Outsourcing

Should you outsource app development?

Absolutely!

According to data by Deloitte, the promised cost-saving is the main reason why companies outsource app development today. Below you can see the main reasons why you should consider outsourcing development today.
Main Reasons to Outsource App Development
Let’s investigate each of the benefits in more detail.  

1. Cost efficiency

This is the first and foremost reason why companies outsource app development today. Hiring a programmer to make an app is always cheaper than creating your own app development team. Whether you are working with a mobile software development company or freelance mobile app developers, the cost of mobile app development services will always be lower.

Depending on the location of your business and destination to which you decide to outsource mobile app development, the cost-saving can range from 20% to 70%.

When you look at the professional developers market, an average annual salary in the USA is around $80,000. If you decide to outsource app development to Europe, Armenia in particular, mobile software development services will cost you anywhere between $30-40 per hour.

Want to know app development cost?

We prepared a detailed guide explaining the processes involved in app cost calculation. You will learn how our company approaches the cost evaluation process and which factors influence the final price. Check the extensive guide: How Much Does It Cost to Build an App? (2020 Cost Calculation)
  2. Better business focus

Mobile application outsourcing is a complex process that requires a lot of dedication and time. Working with mobile app development agencies, you automatically delegate a lot of work that would have otherwise required your personal management and control.

Once you have hired an app development company and settled the communication process, you will only need to provide timely feedback. A professional outsourcing development company provides you with a dedicated project manager who oversees all tasks on behalf of you. They give you timely updates to keep you up on the track and to receive feedback when it’s needed.

As a result of mobile application outsourcing, you get additional time on your hands that you can spend on other business tasks that can’t be delegated, like raising investments, making partnerships, marketing, etc.  

  3. Top experts in the field

Some projects might require the involvement of rate talents, like AI or AR developers. In cases when you outsource mobile app development, you won’t have any problems with finding and hiring experts in a specific field. Mobile app development outsourcing doesn’t limit you to a specific location or time zone. You can find a professional from across the globe to work on your project.  

  4. Broad skillset

The best outsourcing companies have a multi-level team structure with different specialists. Usually, a development team consists of a Project Manager, Business Analysts, Software Engineers, Quality Assurance Engineers, etc. Cooperation with such an application development team will speed up the development process significantly, as everyone is responsible for a specific part of app development.  

  5. Quicker development process

This is one of the main reasons to outsource app development. Time rules the world and even a couple of days can make a huge difference for a new digital product. Therefore, it’s important to launch a new product on the market as soon as possible and within a previously set deadline.

When you outsource mobile app development to a professional vendor, your partner carefully estimates project and timeline and then uses this information to allocate the required number of resources to stick to the set deadlines. As a result, you can move from an idea to a ready product much faster.

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  6. Flexibility

One of the main principles of successful mobile application outsourcing is to work with a company that uses one of the flexible software development methodologies, like Scrum, Kanban, etc. Such approaches to software development require the division of the process into small parts, so-called sprints. The result of each sprint is a fully working new feature or part of a digital solution. 

Therefore, you won’t have problems with changing plans in the middle of the app development process. Your mobile app development team will quickly make the necessary shift and adjust the processes according to the changed business requirements.  

  7. Scalability

Once you decide to speed up the development process or develop some complex and unique functionality, you will need to increase the number of team members. If you choose an in-house team, you need to take care of the hiring process yourself. Mobile application outsourcing allows for a higher level of flexibility. Companies with a lot of experience can easily scale up your team from 5 to 15 developers without a problem. Thus, even drastic changes in plans won’t interfere with the project timeline.  

  8. Risk reduction

A sudden decision of a senior developer to leave a company is the worst nightmare of any business owner developing a new digital project. Finding a new specialist on a tight schedule might be a very challenging task. When you work with a mobile application outsourcing company, it takes on all risk mitigation tasks. 

The same goes for in-project processes and unexpected problems with features implementation. A Project Manager estimates all risks and is responsible for their mitigation.  

  9. All-sided business support

Mobile app development companies usually provide a range of different services, including marketing, market research, business analysis, etc. Thus, they ensure all-sided business support and undertake all the possible efforts to ensure that your project will have the highest chance for success after launch.  

  10. Security

Outsourcing development has another significant advantage over the in-house development team. Professional companies have protocols ensuring that your new application will work within local legislation and data protection rules. Development companies use GitLab for secure source code storing, Confluence and Google Driver for project documentation.

Signing an NDA (Non-Disclosure Agreement), you can make sure that not only user data but your own app idea will be protected.

To sum up everything said above, take a look at the below table covering the main differences in working with freelancers, an in-house development team and a software development agency.

In-house team Freelancers Mobile app development company
Cost efficiency + +
Quality of service + +/- +
Project timeline + +/- +
Flexibility & Scalability +
Top talents +/- +/- +
Reliability + +
Project management + +

Do you want to hire an app development company?

We are a mobile app development company with extensive experience in the field. Reach out to us for a free tech consultation with our top talents.

Main Concerns of Mobile App Development Outsourcing

Why Companies Hesitate to Outsource App Development
While the benefits of mobile app development outsourcing are obvious, many companies still hesitate to pursue them as they don’t know how to outsource app development wisely. Let’s take a look at the main concerns that might prevent you from mobile development outsourcing and how to overcome insecurities with zero loss for a business.
  1. Choosing the wrong vendor

This is the main concern of those who decide to outsource app development. In most cases, companies that choose a vendor based on price comparison make this mistake. For example, when you outsource app development to India, you risk getting the low quality of code in the future. Thus, selecting a vendor based on these criteria might not be the best solution.

Solution: select a vendor based on a number of criteria, including portfolio, experience, client reviews, etc.  

2. Unexpected results

So, you’ve found your ideal company but the vendor doesn’t deliver the expected results. Sounds like a nightmare, isn’t it?

Such a problem is common among vendors and clients that don’t share expectations. If you are silent about what you want to get at the end of development, don’t expect your vendor to guess your business requirements and expectations.

Solution: initial project discussion and timely feedback guarantee that you will get the results you want to need.  

3. Security concerns

Often clients don’t know how to outsource app development and keep their business safe. They are concerned about security and sharing access to sensitive data. Still, you can easily mitigate the related risks by working with a professional outsourcing development company.

Solution: sign an NDA and stick to the specified rules for the duration of cooperation.  

4. Communication issues

Setting up a smooth communication process is a necessity for successful mobile application outsourcing. Usually, a project manager is responsible for direct communication with the client, so getting the process right shouldn’t be a problem.

Solution: negotiate and set up the communication process from the start with your project manager.  

5. Underqualified vendor So, you’ve found a mobile app development team that seams perfect to your team and they manage to mess up your project? Such a problem probably occurred because you haven’t made sure to check the mobile app development company portfolio

Solution: before you hire a team, check the company’s portfolio as even the best vendor might not have the needed talents and experience. If you want to have a smooth run of your project, get in touch with our team for tech recommendations and project estimation.

Outsource App Development: Key Models

Outsource Mobile App Development: Business Models
Now that you know the pros and cons of mobile development outsourcing, it’s time to puzzle out the differences between key models of mobile application outsourcing.

  • The fixed price model

This type of model is the best solution for big companies already knowing what result they want to get even before they outsource app development. This business model is not suitable for startups that need a flexible approach to app development.

The fixed price model requires a lot of prior preparation and investigation. You agree on the final result and price before development starts. It means that you are not allowed to make changes to the development process after it has started. In cases when such changes are mandatory, they will cost you additional money and development time.

If you decide to go with such a model, you will need to spend a lot of time with your vendor creating detailed project specifications. Before the process starts, you and a vendor should have a full understanding of the final goal and result of development.

  • Time & material model

This outsource app development model offers a lot of space for development pivots and sudden changes. Many companies prefer to work with such a model, as the whole development process is divided into multiple steps with a specified final result. After a result is delivered, you plan tasks for the next development stage and can make extra changes even in the middle of development.

Outsource app development cost on this model is calculated based on the hours the developers spend working on your project. Still, you get the initial project estimation and timeline before you agree to work with a vendor within this business model.

  • Dedicated development team

If you decide to outsource app development to a dedicated team, you get a number of advantages, such as flexibility in terms of changes, higher dedication to your project, and better control over your team. The dedicated team is like a remote IT department of your company with a better communication process and control over development.

If you are not sure which business model will be the best for your project, take a look at the table below comparing the main approaches to outsource mobile app development.

Model Budget Timeline Scalability Work scope Payment
Fixed price Predefined Fixed Low Predefined Full prepayment
Time & material Paid per milestone  Estimated by team Middle Estimated based on project requirements Per  development stage
Dedicated teams Paid per milestone Estimated by team High Estimated in progress Hourly rate

Interested in finding a dedicated development team for your project?

Get in touch with us to discuss your project in more detail. We will provide you with a project estimate and advise you on the best business model.

Main Destinations for Application Development Outsourcing

How much does it cost to make an app?

You are probably wondering about the cost if you decide to outsource app development. The price you will need to pay depends on a number of factors, the main of which is the destination to which you outsource mobile app development. Luckily, you have a few options to choose from, thus making it possible to successfully outsource app development with any app development budget.

Here are a few destinations that you should consider:

  • Onshore mobile application outsourcing entails working with a software development vendor from the same region as your company. For a better understanding, the simplest example is a startup from the USA outsourcing development to a vendor from the same country. While onshore development provides you with the possibility of personal meetings, it might not be the best idea for small companies with a limited budget. Hourly rate to outsource app development in the UK and the USA starts at $150-200.
  • Nearshore outsource development means working with a company from a nearby country with the time difference no more than 2-4 hours.
  • Offshore mobile app development means that you decide to outsource mobile app development to a company from anywhere in the world with the time difference surpassing 4 time zones. This model of mobile application outsourcing attracts a lot of companies since the price for development services in different regions of the world varies greatly.
Out of all outsourcing destinations, Europe stands out thanks to competitive prices and a high level of technical expertise. You can see the main difference in the development hourly rate in Europe and other locations, like the USA. 
Main Locations for Application Development Outsourcing
Out of all destinations Europe attracts companies that want to outsource app development with a wide pool talent, quality and price ratio, great knowledge of English, subtle cultural difference, and comfortable time zone

How to Outsource App Development In 6 Steps

Now that you know everything about the benefits of mobile app development outsourcing, let’s take a look at the main steps comprising the road to successful app creation.

The Process of Successful Mobile Application Outsourcing

Step 1: Decide on the project type

When trying to decide how to outsource app development, the first thing you need to understand is the type of project you are going to develop. As regarding app development, you can create a small, medium or a large application for one or a few operating systems.

By the time you start looking for app dev companies, you should already know which application you are going to create – a healthcare app, dating app or an eCommerce application. Then, move on to calculate the budget you can afford to spend and create an initial list of requirements.

Interested in building an app for your eCommerce business?

Our team created a detailed guide explaining the main steps and processes. You will learn the benefits of building your own eCommerce application, discover basic and flagship features, and technical integrations. Check the article: How to Make Online Selling App: Tech & Business Details (2020)

Step 2: Choose between platforms

Depending on your budget, you can outsource mobile app development for a single app version creation or for the development of an app for both iOS and Android. Making the right choice would be impossible without knowing your target audience and how it is distributed between platforms.

Step 3: Devise project requirements

At this point, you should already know which platform you will target. Move on to work on the features list for your future applications. Aside from some standard features like sign-in, user account, etc., work on coming up with unique features that will set your application aside.

Step 4: Find an outsourcing development company

Knowing which features you are going to implement, it’s possible to identify the best companies to work with.

Start the research of companies with such platforms like the Manifest, Clutch, GoodFirms, etc. Pay close attention to the top ten app development companies list and don’t forget to check out other vendors. Use a complex approach and analyze a number of factors. After analysis, you need to have a list with such specifications as the number of years, relevant experience and portfolio, customer reviews, hourly rate, etc. Based on this list, select a few vendors for future screening interviews, during which you need to assess the level of English and communication, how they approach the development process, and how they overcome cultural differences.

Addevice is Among Cutch Top Mobile App Developers

Step 5: Organize project management

The communication process plays a huge role in successful app development. Make sure to organize communication and project management before developers start their work. You can use different software solutions that will help you communicate with your team, track all tasks, exchange files and ideas, etc. In professional companies, the Project Manager is responsible for communication with clients and the organization of all processes inside a development team.

Step 6: Enjoy the benefits of mobile application outsourcing

After you have learned how to outsource app development and make the process successful, you can enjoy the benefits of working with highly experienced developers. You can concentrate attention on other business tasks and only spend a little time overseeing the processes inside your application development team.

Outsource App Development: Where to Start

Congratulations!
You now know how to outsource app development without vesting time and money. To make sure that you fully understand what it takes to outsource app development, let’s sum up everything said above. Here is what you can do to make the work on your project to run smoothly:

  • Don’t compare prices – select a vendor based on a number of criteria, including expertise, relevant experience, etc.
  • Set clear expectations – set clear goals from the very beginning of cooperation with a development vendor.
  • Provide timely feedback – don’t hesitate to provide feedback and share inputs with your app development team to keep them on track with your expectations.
  • Set up communication – use Slack for communication, track all tasks in Jira, conduct video calls via Zoom, etc.
  • Discuss payment before development starts – negotiate app development cost and timeline prior to signing an app development contract with a company. This way, you will be able to avoid unexpected surprises and unforeseen changes in payment terms.
Here is what you can do to make the work on your project to run smoothly:

  • Don’t compare prices – select a vendor based on a number of criteria, including expertise, relevant experience, etc.
  • Set clear expectations – set clear goals from the very beginning of cooperation with a development vendor.
  • Provide timely feedback – don’t hesitate to provide feedback and share inputs with your app development team to keep them on track with your expectations.
  • Set up communication – use Slack for communication, track all tasks in Jira, conduct video calls via Zoom, etc.
  • Discuss payment before development starts – negotiate app development cost and timeline prior to signing an app development contract with a company. This way, you will be able to avoid unexpected surprises and unforeseen changes in payment terms.

Do you have an app idea but don’t know where to start?

Get in touch with our team for your project discussion. Our software architects and business analysts will happily analyze your project and offer the best course of action.

Frequently Asked Questions

What is the state of the application outsourcing market?
The market of application development outsourcing is booming. In 2019, the market generated $66.5 billion as compared to the market of business processes outsourcing with only $26 billion in revenue.
How to outsource app development?
To outsource app development, you need to find a software development company. Start with such platforms like Clutch, GoogFirms, etc., as these are the best outsourcing websites. Shortlist the best app outsourcing companies, conduct screening interviews, collect and analyze data to make the right choice. You can check this article to find a detailed guide on how to outsource app development
What is the difference between in house development vs outsourcing?
When you create an in-house development team, you need to take care of the hiring process, taxes, and legal issues yourself. When you work with an outsourcing development company,  it takes care of all the hiring processes and mitigates any risks relate with development. You still have full control over your remote team and can influence the development process.
What is the main benefit of mobile application outsourcing?
The reasons to outsource mobile app development are numerous and include such benefits as faster development, lower risks, flexibility and high scalability. Still, the main benefit is the reduction in outsourcing app development cost. On average, a company that outsources app development can save $100,000 every year.

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