How to Outsource App Development (Benefits + Cost)

Mobile app development isn’t quite as daunting as it used to be. New technology like no-code app builders has made app development more accessible to the masses.

With that said, many businesses still prefer to outsource mobile app development—and it’s often the best path for mid-market organizations.

If you need an app for business but don’t know where to start, this guide has you covered. I’ll explain everything you need to know about outsourcing app development, including the benefits, costs, and finding the right partner. 

What is App Development Outsourcing?

Mobile app development outsourcing means working with a third-party service provider to build an app on behalf of your business. It’s a type of software development outsourcing that specifically refers to mobile apps built by an app development company or developers who aren’t part of your in-house team. 

The company seeking app development services still owns the app. They just get someone else to build it for them. 

App development outsourcing can be used for any type of mobile app—including internal apps for HR and employee communications or customer-facing apps for your core business model. 

9 Reasons to Outsource Mobile App Development

There are dozens of benefits to app development outsourcing. But these are the top nine reasons why businesses choose to outsource app development.

1. Cost-Effectiveness

Developing an app in-house can be expensive. Most companies don’t have the personnel on staff to handle app development, which forces them to hire new employees. 

US software developers make between $96,760 and $161,40, with the median sitting at $127,260. That’s just for one developer in a single year—not to mention the costs associated with benefits, payroll taxes, training, and other costs for onboarding a new employee. 

Rather than spending $300,000 on labor alone, you could outsource development for around $30,000. 

2. Faster Development Timeline

Launching your app quickly is crucial for getting a faster return on your investment. That’s why long development timelines can hurt you in multiple ways—they’re expensive, and you’re not getting anything in return during the app development process.

This holds true whether the app is customer-facing or solving internal inefficiencies. 

But app development companies already have dedicated teams and processes in place. They have the tools, skills, and knowledge to build apps quickly and more efficiently than an in-house team during this for the first time. It could take your IT team 9-12 months to create an app, whereas an app development agency can knock it out in 3-6 months. 

3. Ability to Focus on Core Business Operations

Mobile apps are supposed to improve businesses, not hinder them. 

If you’re investing 60-80+ hours per week managing this type of project on your own, then who’s going to handle your day-to-day responsibilities?

Lots of businesses don’t think they need to consider mobile application development outsourcing because they have skilled developers in-house. But what are those developers currently working on? Who is going to handle those duties if you allocate those resources to a different project?

Outsourcing app development means you can keep the wheels in motion and without compromising your core business objectives. 

4. App Developer Expertise

Developing an app is a considerable investment for any business. With the stakes high, you want to make sure that you have the best mobile app developers working on your project.

Sure, you might have one or two people on your staff who have built an app in the past. But wouldn’t you rather work with mobile app development agencies that have built thousands of apps?

It’s like anything else. The more experience you have, the better the final product will be. It’s rare for an agency to come across something they’ve never seen before. But if you’re using in-house talent, this could be a weekly or even daily occurrence. 

5. Access to the Latest Mobile App Technologies

App development is more than just writing code. The best apps leverage cutting-edge technology to ensure the app performs well and delivers the optimal user experience post-launch. 

But the latest and greatest technology comes at a cost. 

Look beyond the app itself. You have authentication servers, databases, push notification servers, integrations, and more—there’s an entire mobile app infrastructure that’s happening behind the scenes. It’s tough to replicate this on your own, and it often doesn’t make sense from a cost perspective. It’s easier and more cost-effective to get this technology included with mobile development outsourcing. 

6. Scalability and Flexibility

When you outsource mobile application development, it’s much easier to grow and scale compared to handling this on your own. 

Let’s say your app grows from 10,000 to 100,000 users. Mobile app development services can easily help accommodate this kind of growth without any downtime or user experience issues. 

Or maybe you want to add a new custom feature three months after the initial launch. It’s not as easy to do this on your own. 

7. Cost Predictability

The cost of outsourcing mobile application development is much more predictable than doing it in-house. More often than not, you’ll have a final quote from the development agency—and you know that the project won’t go over that number. 

But going over budget is practically guaranteed if you’re building an app in-house. Why? Things happen.

People get sick. Equipment goes down. Some sprints take longer than initially anticipated. 

An app agency will never come back to you and say, “Hey, one of our developers quit, so we had to hire a new one. So we’re going to add an additional $10,000 to your invoice to account for the training costs needed to onboard our new hire.” 

If something like this happens internally within your organization, the cost will come out of your pocket. And there’s really nothing you can do about it. You’ll have to pay whatever it costs because you need the app, and you’re not going to invest thousands of dollars and months of time to settle for an incomplete project. 

Pro Tip: Use our App Development Calculator to estimate how much it will take to build an app for your business. 

8. Reduced Legal and HR Burdens

As previously discussed, building a dedicated team to build your app is expensive. But beyond labor costs, your in-house team can lead to significant legal and HR burdens. 

You don’t have to worry about workers’ compensation claims or dealing with paid parental leave if you’re working with an agency. 

In some cases, in-house app developers could even try to claim ownership of the source code of your app. No business wants to deal with these types of headaches. 

9. Continuous Maintenance and Support

Building and launching a mobile app is really just the beginning of app development. Your app still needs lots of attention and care for it to continue working and be successful for the long haul.

What happens when a new iOS version comes out? Apple just changed its App Store requirements—not what? How will you address bugs, glitches, or new security threats?

If you built the app in-house, you need to allocate development resources to deal with this stuff on a regular basis. It’s not like you can just hire a team for one year and then fire them once the app goes live. That $300,000+ in annual labor sticks with you for the lifetime of your app if you’re building it in-house. 

But when you outsource mobile app development, you’ll get ongoing maintenance and support for a low monthly fee. You won’t have to worry about maintaining your app at all if you have the right partner. 

How to Evaluate the Costs of Outsourcing Mobile App Development

How much does it cost to build an app in-house compared to outsourcing app development? I’ll break that down below. 

Factors That Influence App Cost

When it comes to outsourcing app development, these are the most common factors that influence the total cost:

  • App Complexity — Advanced features that require custom code will be more expensive than basic apps that can be developed with simple, pre-built functions. 
  • Location of development team — Offshore mobile app development teams are typically cheaper than US-based app developers.
  • Supported platforms — Do you need an iOS app, Android app, or both? 
  • Backend technology — This refers to the software and servers required to power and maintain your app during development and after it goes live.
  • Development timeline — Typically, the longer it takes to build your app, the more expensive it will cost. 

This is the starting point for most people. We also have an in-depth guide that breaks down the cost of app development in granular detail, comparing costs related to app category, design costs, and even infrastructure services. 

Cost Comparison: In-House vs. Outsourced App Development

Let’s say you want to build an average app for your business. It’s nothing too fancy, but it handles all of the basics—like allowing users to create a profile and sign in, it connects to the internet, has a database on the back end, and you want it to integrate with calendars and social media. Plus, you want to build it for both iOS and Android devices. 

If you build an in-house team, you’ll likely need at least two app developers for this type of project. We’ll estimate on the low end and say their salary is $80,000 per year, each. That’s $160,000 in labor (assuming you find quality developers willing to work for that rate). 

$160,000 before a single line of code even gets written. Servers will cost another $10,000 to $12,000 per year, plus another $10,000 to account for things like APIs, push notifications, and integrations. We’re nearing $200,000 and the app is just getting started, and we haven’t even touched upon project management or quality assurance costs. 

On the flip side, you could outsource this same exact mobile app to a third-party development team for $25,000 to $40,000. That’s your out-the-door cost to launch before updates and ongoing maintenance. 

Maintenance from an app development agency will likely cost around $5,000 to $10,000 annually. This would cost at least $40,000 in-house, even if you’re using just one developer for this and allocating their resources to other projects. 

In this example, building, launching, and maintaining your app in-house would cost about $360,000 (on the low end) over five years. Outsourcing the same app would cost $65,000 to $80,000 over five years. 

While this is just one example, it highlights what you’ll see across the board—outsourcing app development is roughly 20% of the cost compared to building in-house. 

Understanding Pricing Models in Outsourcing App Development

All app development companies each have their own unique way of pricing mobile app projects. With that said, you’ll likely find one of the following three models:

  • Fixed Rate — This is the most straightforward. The company tells you the total app cost, and you pay that number. It’s the easiest way to estimate and stay within your budget, but your developer could cut corners if unexpected issues arise (although you won’t have to worry about this from a reputable development company).
  • Hourly Rate — Hourly billing is more common from freelance app developers compared to agencies. Rates can vary significantly, with rates starting around $30 per hour for developers in India, $50 per hour in Eastern Europe, and upwards of $80 per hour in the US. Some developers can give you an estimate of how many hours the project will take. But if it ends up taking longer, you could go over budget. 
  • Subscription Rate — With the subscription model, you pay a fixed monthly, quarterly, or annual fee to use app development software. This can range from $100 to $500 per month, depending on the tools and features you need. 

The subscription model is often the best route, assuming you have the right app development partner. It’s less of a financial burden than paying $20,000 or $50,000 upfront. That’s the obvious reason. 

But if you outsource your app project to a company like BuildFire, you’ll also have the option to leverage our in-house development team if you need something unique or custom. For basic app features, 80% or even 90% can be handled with our app builder. Then we can bridge the gap with that remaining 10-20% to help you save money while still getting exactly what you need.

The annual subscription could cost you $6,000, and a custom function (if you need it) might cost an additional $6,000. 

Hidden Costs and How to Avoid Them

The cost of building a mobile app goes beyond the development process and the app itself. You also need to account for:

  • Maintaining your staff
  • Project management
  • Quality assurance
  • Hosting
  • Refactoring
  • CDNs
  • Training
  • UX Design
  • UI Design
  • Security
  • Administrative Services

The easiest way to avoid these hidden fees is by outsourcing. When you outsource app development, cost is essentially set in stone. You pretty much know exactly what you’re going to pay, and you don’t have to worry about any surprises popping up along the way.

How to Choose the Right Mobile App Development Outsourcing Partner

There are thousands of agencies out there that offer software development services. So how can you narrow down your search and find an app development company that meets your needs?

Keep the following considerations in mind as you’re comparing different options:

  • Look for an outsourcing company that offers strategic consulting for your app idea.
  • The best app development companies handle all aspects of project management for you.
  • They should also deal with quality assurance and testing. 
  • Pricing should be clear. If you’re not given an exact quote, you should at least be given a range with expectations.
  • Determine whether you want to work with a US-based development company or if you don’t mind sacrificing quality to save money. Language barriers should also be taken into consideration.
  • When you outsource mobile app development, make sure your partner gives you a timeline of when you can expect the app to be completed. 
  • Make sure the outsourcing company offers post-launch maintenance and support.
  • Ideally, the development agency you’re considering should have experience building apps in your industry. 

For more information, review our guide on what to look for in a mobile app developer. We also have a detailed resource on how to choose the best mobile app development company for your business. 

Managing the App Development Outsource Relationship

Once you’ve settled on an outsourcing company and started to work with their app development team, there are certain things you need to keep in mind to maintain a quality relationship with them.

First, make sure you have enough meetings before development actually starts. This ensures that everyone is on the same page so they know exactly what you’re looking for. Getting some wireframes, mockups, or even app prototypes can really help during the pre-development and design phases. 

During development, you can set some milestones and ask for updates on a regular cadence. But again, it’s best to establish this ahead of time. If you’re just going to email the outsourcing company once a week asking, “I’d like to see what my app looks like so far,” then you’re not giving them an opportunity to really work on it. 

The purpose of outsourcing is to remain hands-off. While you should still be part of the process, you don’t want to micro-manage the team. They aren’t your employees and you shouldn’t treat them as such. 

That’s why it’s so important to find the right partner from the beginning. It makes it much easier to manage the ongoing relationship when everyone is working toward the same common goal. 

Final Thoughts: What to Expect When You Outsource Mobile App Development

In short, you can expect it to be much more cost-effective and easier to outsource mobile app development compared to building an app in-house. 

Maintaining an internal development team really only makes sense if you’re planning to build multiple apps on a regular basis and use them for a variety of core business functions. But even in this scenario, outsourcing should still be taken into consideration. 

One unique aspect of using BuildFire for app development is that you have access to our pre-existing app development infrastructure. This drastically reduces the time and costs associated with traditional development—plus, you can launch an app for iOS and Android with a single build. 

You can also leverage our app development platform and app development services under one roof. Whether you’re looking for assisted setup and design services and then want to manage the app on your own, you want to build it on your own and leverage our team for something specific, or you want us to do all the heavy lifting for you, there are plenty of different options to choose from. 

Schedule a consultation today to see how BuildFire can bring your app to life.