The True Cost of Apps

by | Aug 19, 2019 | Expert Blog, News & Opinion | 0 comments

Having built mobile apps for ten years, it’s perhaps not surprising that we get a lot of app “briefs” into our mailbox. These eminate from new clients, former clients (never old!), new businesses, global businesses and established local businesses trying to keep up. Unsurprising thus far, but, what never fails to surprise is the volume of these briefs which begin with “we have an idea for an app…”. This is usually followed by some sort of description that is often along the lines of “like Uber but cheaper” or “like Monzo but for skateboards” or “think facebook for the axe-throwing world”. And the inevitable question- “can you tell us how much this will cost?”. Those aiming to establish what budget is needed to build (and this is a genuine example) “an app like Uber”. Take a moment. An app like Uber … that business backed by multi-billion dollar investment that started small, evolved, changed, reverted, and has continued to grow and faced disruption itself with the likes of Lyft. Whilst an instinctive reaction might be to point the enquirer to various articles and publications outlining the investment that’s gone in to a product like Uber with our tongues firmly in our cheeks. The wiser opinion was to write a blog post.

 

There is no easy answer to this question but our 10 years of app development, great client feedback and multiple award wins makes it obvious why Mubaloo gets asked it!

 

 

What influences cost?

What we can do is explore and share some of the factors that determine the cost associated to app development (whether in house or with an agency) and consider the cost of not building the right app or in the right way. Our 6 Key Success Factors determine a great way to help us work with clients to determine estimated costs for development. Where we see gaps in the criteria, we can advise clients where the risks in development are likely to be and pivot/flex the delivery teams to mitigate accordingly. For instance, where security requirements are unknown we can…

In all development projects (perhaps more so in Kanban/Agile when the detailed scope is not known up-front) having a process to understand where risk and unexpected investment is likely to emerge will prove invaluable. This shared understanding from the outset supports decision making and pace which then reduces the opportunity costs and allows clients to realise their vision sooner than expected.

 

Money spent before coding?

Regardless of budget, our approach to development almost always follows a Discover, Design, Deliver and Grow process with investment against each of these often reflecting client’s appetite for risk and the significance of the product to their business operation. A client looking to launch through the development of a digital product or experience is far more likely to invest significantly in discovery and design whereas a client who’s developing something tactical or for a one-time use (e.g. in a campaign) is more inclined to lighten investment in discovery as a proportion of the overall build as they “take a punt” on what’s to be created.

Before thinking about investing in an idea to build an app or any digital experience, keen consideration of the user (or “customer”) and what they are trying to achieve is vital. Without canvassing users and validating what they are looking for, at scale, adoption, engagement and any sort of return is jeopardised at the outset. Don’t get me wrong, you can still disrupt a market without speaking to users, but it will cost you a lot more and you’ll have to move a lot quicker to avoid being caught by others in your space.

A popular option amongst clients is to prototype prior to developing anything. This might appear to add extra cost but significantly decreases risk of spending (sometimes) hard to access capital in creating a product that we don’t know will be successful. Prototyping techniques have become easier and quicker, so working through stories to test key functionality and user journeys, facilitates rapid learning and design before a line of code is even written.  

Evolution of the cost of change, by project stage:

In some instances, prototyping has taught us all – client and agencies – some valuable lessons around what users really want… and has helped to open the minds of stakeholders and investors as to what users of a product are really trying to achieve.

The output of understanding user needs and prototyping can also be upcycled and contribute heavily to release plans and growth strategies as they provide means to identify the hooks and incentives that will best attract adopters and evangelists for the final product.

 

Investment needed after coding

The disruptive and forward thinking businesses are recognising that digital products are no longer a one time investment in budget and time.  In order to be successful in the long term, continued investment beyond MVP is needed not only to evolve the features within the product in response to real user needs, but also to maintain the product in the context of constant technological changes which demand updates, patches and fixes to be delivered in order to drive continuing value.  

 

“A strategic core-app is for life – not just for one financial year.”

Once investment stops, risk increases. We encourage clients to consider the success factors of a product so the response can be proportionate. Some companies are pleased to see bespoke developments replaced by easy to consume SaaS products, others face significant financial challenges when the ability to drive value from their product is halted or disrupted by external factors which could well be defended against. By this point, if KPIs have been determined effectively, the app’s value and ROI will justify the ongoing investment and cover the cost of further enhancements and evolution to improve performance.

The long-term lesson on the cost of application development is recognising that an application build is rarely a “one off” cost – especially when the app is being woven into important BAU practices of your business. Support, maintenance and long term upkeep comes at a price and holding off on further investment in updates to the app almost always result in the need to re-build or replace the app entirely. All technology has a shelf life and thinking of an application as an asset that needs care and investment, in order to sustain its value, is really important in determining ‘how much does an app cost?’.

 

So to answer the question, “how much does an app cost?” we can summarise that there are many ways and means to make sure that the initial investment for developing an application can be spent better by doing user insight, defining objectives and blending the right levels of discovery and design activity based on the overall goals. Beyond that, organisations who understanding that initial investment is only the beginning are far more likely to see the rewards and long term value of a product. The cost of the wrong app can be considerable – affecting brand, budgets and personal reputations. The businesses who get things right will see there is no cost of an app… only investment for return. 

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