How to Determine Whether to Build Your Own Applications or Outsource Them‍

Should you build your applications or outsource app development? Of course, both options have pros and cons, and choosing one depends on many factors. Here's a guide to help you.

In this digital age, consumers use their smartphones to read the news, discover new brands, buy products, and stay in touch with family and friends. Most of these things would only be possible with mobile apps. So whether you want to track your workouts, check the weather, or book a flight, there's an app for it. 

Perhaps not surprisingly, the number of mobile app downloads hit a record 230 billion in 2021. Moreover, 63% of consumers favor brands that offer custom recommendations through mobile apps or sites. 

Entrepreneurs can leverage these trends to drive revenue and expand their reach. Think of it as an opportunity to improve customer satisfaction, boost brand awareness, and connect with your audience on a deeper level. 

The question is, should you build your applications or outsource app development? Of course, both options have pros and cons, and choosing one depends on your budget—among other factors. 

Let’s take a closer look at the benefits and drawbacks of building an app in-house and when to consider outsourcing.  

How much does it cost to build an app?

As you might have guessed, building an app in-house can be expensive and time-consuming. Plus, it requires ongoing maintenance and upgrades, which can further increase the costs. 

Applico, a business consulting firm, says it costs between $5,000 and $500,000 to develop a brand-new app. Most customers end up paying around $100k to $300k, depending on several factors:

• Their expectations in terms of quality, cost, and speed
• App development methodologies
• In-house vs. outsourced development
• Supported platforms
• Type of app
• Backend infrastructure
• Technical features
• Use of visual objects 
• Developer's experience and rates
• App maintenance costs
• Additional services

For example, it's one thing to build a simple app that can convert currencies or send reminders for your to-do’s and another to create complex mobile apps for enterprise use. The more features you want, the higher the cost and the longer it takes to get things done. 

Expect to pay at least $40,000 for a basic app with essential features like real-time notifications and online search. This kind of project should be ready within two or three months. 

A more complex app that supports online payments, loyalty programs, or live chat will cost around $60,000 or higher. And if you want to build the next Instagram or Uber app, be prepared to spend at least $300,000. In this case, the development process can take up to one year.

Given these aspects, it's not surprising that fewer than half of small businesses have a mobile app. But although the cost may seem high, there are ways to save without sacrificing quality.

Should you build your app in-house or outsource it?

Regarding app development, you have two options: build your app in-house or get help from outside. Alternatively, you can take a hybrid approach to this process and only outsource what you can't do yourself. 

Before making a decision, consider the factors listed above, plus the following aspects:

• Your industry and type of business
• Your geographical location 
• Organizational goals
• How you plan to use the app
• The workforce required to build your app
• Existing talent and skills 
• The stage your business is at

For example, web developers based in North America or Australia charge higher rates and expect higher salaries than those living in Eastern Europe or Asian countries. 

Based on this aspect, you'd be better off outsourcing app development to an agency based in Romania, Poland, India, or the Philippines. But you could also hire an app developer based in any of these countries and let him work remotely, which would be cheaper than hiring local talent (assuming your business operates in the U.S.). 

Also, consider the purpose of your future app. Make sure you know how to scope software projects, especially when working on something you've never done before, such as an app that introduces new services or features. 

In this case, you'll want to hire the best talent you can afford, whether in-house or outsourced. Naturally, therefore, the costs will be higher, especially if you opt to collaborate with digital marketing service providers to promote your app effectively.

But enough with the talk. Let's take a closer look at the pros and cons of in-house app development. 

Why you should hire an in-house developer

Amazon, IBM, and other large enterprises are known for their outstanding development teams. As a result, they prefer to hire in-house rather than outsource because it helps ensure a better cultural fit. 

What's more, this approach makes it easier to communicate with your team, leading to faster approvals and greater control over the project. An internal team will better understand your business, its mission, and core values than an outsider. 

Hiring in-house developers can also streamline decision-making, as all the parties are in the same location. You can discuss with your team in real-time, hold meetings as needed, and manage your employees as you see fit. 

You could use Zoom and other collaboration tools to keep in touch with external developers, but these people may not be available when you need them. Freelancers and contractors, in general, have several clients and work on multiple projects at once, which can slow things down. 

Potential drawbacks of in-house app development

Developing an app in-house can be pricey, especially if you need to hire additional staff or purchase specialized software. 

The average app developer in the U.S. earns approximately $73,659 per year, plus benefits. However, this number can go up to $104,000 or higher, depending on the employee's experience, location, and other factors. You'll need at least two or three developers to build a complex app, which can drive the cost up. 

Apart from that, you need to consider the costs of office space, transportation, work equipment, meals, etc. The recruitment process can be expensive and time-consuming, and there's no guarantee a new hire will stick around long enough to make it worth it.

Additionally, your team may have access to different resources than an app development company, which could affect the quality and functionality of the final product. Even if the app works as expected, your staff may need help to keep up with regular maintenance demands. 

Why you should outsource app development

About 64% of companies outsourced app development in 2017, and this number continues to increase each year. Some go this route to keep the costs down, while others value convenience and flexibility. 

As discussed earlier, software developers charge different rates depending on their location—among other factors. 

Let's see a few examples:

• Poland: $35-$55/hour
• Romania: $25-$45/hour
• Ukraine: $25-$50/hour
• Germany: $100-$150/hour
• UK: $200/hour
• Brazil: $30-$50/hour
• Argentina: $35-$55/hour
• India: $25-$50/hour
• Vietnam: $20-$40/hour
• U.S.: $61-$80/hour

Based on these figures, it makes sense to outsource app development to contractors based in South America, Asia, or Eastern Europe. Not only is it cheaper, but you won't have to compromise on quality to get a good deal. 

Moreover, app development agencies and freelance developers have the expertise and resources to get things done. Therefore, you won't need to pay for specialized tools and software, which can further reduce costs. 

Outsourcing app development can also free up your time, allowing you to focus on the core aspects of your business. 

If you work in finance or real estate, it doesn't make sense to hire in-house developers. An external agency will be better able to complete your project, maintain and update the app, fix security bugs, and find solutions that fit your budget. 

It's also worth considering that agencies use the latest technologies and have access to cutting-edge tools. As a small or medium-sized business, you may not know what tools to use or what trends to follow to build the perfect app. 

Outsourcing also gives you access to a global talent pool. Plus, it can reduce the time to market and spur innovation, giving your business a competitive edge. 

Are there any downsides?

Hiring freelancers or external agencies is only sometimes the best solution. In some cases, this approach can lead to higher costs, poor communication, quality issues, and a lack of control over the work. There's also a risk of data breaches, information mishandling, and project delays. 

For example, working across time zones can affect communication and slow things down. Plus, working with a team from a different culture may result in misunderstandings. 

Outsourcing can also increase app development costs, especially if there are any delays or revision requests. Some agencies charge by the hour, so you'll have to pay extra for revisions, upgrades, or additional features. 

According to Clutch, push notifications can cost around $50,000 to $100,000. In addition, app testing and deployment may increase the price by up to $10,000, whereas app maintenance in the first year costs about half of the product's initial price. 

Also, an external agency may need help understanding your vision for the app, which could result in the need to create multiple prototypes. This process can drive the costs up and cause delays, increasing your time-to-market. 

Lastly, you won't fully control the project timeline, the information shared, and other factors. Merely signing a contract doesn't guarantee things will go smoothly.

Which option is best for your business? 

As you can see, there's no one-size-fits-all solution to building an app. Choosing one option over another depends entirely on your business needs. 

Developing an app in-house is best if you already have a team of experts. But if the project requires hiring people or training your staff, you may be better off outsourcing the whole thing. 

Hiring an external agency can be a viable option for some companies. 

Below are some scenarios where this approach could work:

• You're short on time and resources
• You don't have experience in software development
• You want to reduce your team's workload
• You want to focus on the core aspects of your business
• You need specialized expertise
• You have a limited budget
• You want access to the latest technology

A third option is to use a hybrid approach. If you already have a small team of software developers, let them do what they can and outsource the rest. 

LC/NC, an alternative approach to app development 

You don't need a developer if you want a simple business app. That's right—you could create one yourself without writing a single line of code. 

We're talking about low-code/no-code (LC/NC) development platforms, a technology anyone can use to build apps from scratch. These tools became popular during the COVID-19 crisis, enabling companies to innovate faster and cheaper. 

As the name suggests, low-code development platforms require basic coding knowledge. Users can simply select and connect different elements to create workflows, automate processes, and build apps. 

Similarly, no-code development tools feature a drag-and-drop interface that eliminates the need for coding. Their simplicity allows non-technical users to create fully functional apps within hours. 

For example, Glide—a spreadsheet-to-app converter—can turn Google Sheets data into professional apps. The platform also offers pre-built app templates you can fill out with your data to create employee directories, to-do lists, restaurant apps, budget trackers, and more. You can even set up a basic mobile store to sell products online. 

Some of these tools are free, while others require a monthly subscription. As you would expect, they're significantly cheaper than hiring a developer and can save you hours of hard work. Companies also use them to accelerate innovation and digital transformation, enhance productivity, and fill talent gaps.

By 2024 more than 65% of apps on the market will come from low-code platforms, according to Bloomberg. For example, Schneider Electric launched 60 apps in just 20 months thanks to this technology.

We're not saying that LC/NC platforms will replace coding, but they can streamline app development in ways we did not think possible.

Ready to build your next app?

Now that you know your options, go ahead and make a choice. Think about the type of app you need and your industry, budget, and long-term goals. 

If you already have a development team, consider building your app in-house to keep the costs low. Unless you work in IT, your best bet is to outsource this project. Alternatively, you can use a hybrid approach or leverage LC/NC development tools. 

If you decide to handle things internally, look into pair programming tools to boost collaboration and productivity. Regarding outsourcing, take the time to research your options and choose a trusted agency. Don’t just go for the cheapest offer—if something sounds too good to be true, it probably is.

Also, consider starting with a simple app built on LC/NC platforms. See how it goes, determine other features you need, and make updates along the way. Later, you can hire a developer to take your app to the next level or give it a more personalized touch.