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Building an App: Should You Outsource It?

Building an App: Should You Outsource It? Credit: Outsource image via Shutterstock

Developing an app can be costly, but outsourcing an entire development team can significantly cut your budget and build time, a new report shows.

SourceFuse, a digital product and software development company, released a new white paper with an in-depth look at the costs of building digital products if directly hiring a development team from scratch versus outsourcing one.

The white paper, "A Guide to Digital Product Team Economics," analyzed key areas that contribute to these costs, such as product stages and corresponding investments; digital team roles and job descriptions; and opportunity costs and total costs of ownership.

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"The report highlights the investment and project risks associated with establishing and maintaining a digital product team in the early stages of new product development," said Kelly Dyer, CEO of SourceFuse, in a statement. "Our analysis suggests for many startups and corporations, building new digital software applications utilizing a Digital Product Team Service can reduce their investment by over 300 percent."

According to the report, outsourcing a development team versus directly hiring one from scratch is most cost-effective during the initial and early stages of development:

  • Minimally viable products (MVP) can be brought to market in six months and start at $115,000 for startups and up to $560,000 for corporations by hiring a technical team. In comparison, outsourcing MVP development costs roughly $120,000.
  • Bringing the MVP to the early stage phase (ESP) – a seven- to 18-month cycle where early releases of the core product are brought to market on only two to three devices every six to eight weeks — will cost between $1.1 million and $1.8 million. Outsourcing cuts the cost by more than half at $527,000.

A spreadsheet calculator with supporting salary and other detailed financial data and assumptions analysis is available by request.

Originally published on BusinessNewsDaily.

Sara Angeles

Sara is a tech writer with a background in business and marketing. After graduating from UC Irvine, she worked as a copywriter and blogger for nonprofit organizations, tech labs and lifestyle companies. She started freelancing in 2009 and joined Business News Daily in 2013. Follow Sara Angeles on Twitter @sara_angeles.