June 30, 2020   |   5min read

App Development Outsourcing: The 2020 Guide

In 2020, the model of work needed to be redesigned by many companies and fast. The digitalization of industries was accelerated; working from home became the new normal. The cooperation of teams spread across the globe is more comfortable with sophisticated communication. However, not all companies want to outsource the development of a mobile application to a third party. Today, we look at the pros and cons of mobile app outsourcing and developing apps in-house.

What app outsourcing companies offer?

First and foremost, we want to answer whether you should build an in-house team of developers or outsource the mobile application development to a development studio. As with most things, both have advantages and disadvantages. The choice will depend on your company, technical sophistication, and more.

In-house or outsourced mobile app development?

In-house development teams do not grow on trees. It takes considerable effort and resources to build such a team. First, the person hiring the engineers must be knowledgeable, making informed decisions, and verifying skills and experience. It will pay a dividend in the form of talented developers who will make your product shine. However, if done poorly, the cost of hiring new employees will render the process even more time- and cost-consuming.

In some cases, building an in-house team right away might be a waste of time. Time otherwise spent on raising funds and, interestingly enough, later on, building a team of developers. Not for the creation of the mobile application, but for its maintenance. At Polidea, we are often engaged in building MVPs from scratch and ongoing, iterative product delivery. The maintenance is forwarded to the client’s maintenance team, which can also work on the product’s future iteration. It’s the best of both worlds’ approach to software development.

There is no doubt that in-house developers have a better understanding of the product, how it should work. The path from a developer to a Product Owner is also considerably shorter. And for many startups which are willing to play the long game, the in-house team is, at the end of the day, a less expensive option.

Speaking of the long term perspective, one of the most significant advantages of software development outsourcing is that it might considerably shorten the product’s time-to-market. An outsourcing company can begin a project right after all the formalities have been completed. Development studios can help vision-oriented clients transform their ideas into products, advising on the tech stack that should be used. It can also provide services that would be much harder to attain in the case of an in-house team. The flexibility of a development studio enables a client to increase the scope of an application, for instance, by adding an embedded device or cloud integration. However, not all studios are specialized in many different fields of development.

CEO of a development studio

Who can benefit from outsourcing?

Considering that the main roadblocks for building an in-house team are money and time, outsourcing mobile applications is often tasked by startups. They have disrupting ideas but lack personnel to make the dream become a reality.

However, shortening time-to-market also appeals to large corporations. Such companies might employ more engineers than the development studio. Nonetheless, each of them is already focused on a long-term project. Starting a new one may be troublesome, especially given the red tape. Corporations are capable of demanding a certain level of code quality, verified with an audit before accepting the software.

How much outsourcing app development cost?

Saying that mobile application outsourcing is more expensive than in-house development is a generalization. Yes, the hourly rate of outsourcing might cost more, but that’s only one side of the coin. When your in-house team is built, you need to take care of your engineers and consider the costs of paychecks, sick leaves, personal holidays. Moreover, you need to plan their career paths and development. Of course, in the long run, it is best to invest in know-how available to you in the next projects. When we consider all the financial costs of building a team, the issue ceases to be black-and-white. The rate you pay for the development studio comes with experienced engineers ready to begin your project immediately.

Time-and-material with a cap

The issue of the best approach to settle invoices with an app development outsourcing company was covered in the article on what to expect when working with a development studio. Instead of repeating ourselves, we want to show another approach that combines Time & Material and Fix-Term Contract.

Time & Material with a cap is an approach that takes the best ideas from both solutions. Writing a scrupulous, 60-page contract that might be outdated upon its signing isn’t the best option. Instead, each month or quarter, you decide on the number of hours spent on the project. You prepare the deliverables that translate into the plan of work. The scope is not as meticulously prepared. It gives the development studio the freedom to utilize the hours in the best way possible. Never going above the budget is an important issue when you want to scale up the project.

Business development Lead in a development studio

Costs of scalability

Technology is changing fast. For instance, in the course of writing this article, iOS was updated to 13.5.1 and the iOS 14 announced. The initial assumptions could be outdated in the span of a mobile app development project that can take about two years.

In terms of scalability, both approaches have their advantages and disadvantages. On the one hand, Fixed-Price Contracts are updated via changed request, which happens almost with every project. Companies working on Fixed-Prices charge heavily on each change request. Since there is no hourly rate, the software development outsourcing company will strive to prepare the code or the product as quickly as possible, putting quality into question. On the other hand, with Time & Material, there is a risk of the company doing everything slowly to bill more hours that there should be. This issue can be boiled down to trust. Do you trust the outsourcing company to perform their tasks reliably? At Polidea, we always emphasize the importance of partnership relations when working with a client.

If you want to become our partner in a mobile app project, let us know!

Paweł Byszewski

Head of Product Development

Michał Górny

Lead Software Engineer

Tomasz Szymoński

Communication Specialist

Piotr Herstowski

Head of Sales

Michał Mizera

Director of IT & Cloud Consulting

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