Working with a development agency or building your internal team?
Recognizing alternative paths to accomplish a complex goal can help support the best decision for an organization. This article covers the high level reasons a company would build a mobile or web application as well as outlines two different strategies to accomplish this as well as estimating posible cost. Through experience, we have seen the consequences of application development that lack proper planning from day one. Hopefully this article will be helpful to those tasked with making a decision on how to develop an application for their business.
| Why do companies build new applications?
There are two basic reasons why a company would want to build a new application. The first is adding value to their product (or building a new product) for their external customers and the second would be building a tool for their internal customers (employees). In both cases leadership will be looking closely at the Return on Investment as one of the leading indicators for the success of the project. This ROI will either translate as increasing revenue or lowering cost thru increasing efficiency and customer acquisition (preferably both).
Knowing that there will be a development team that works to complete this task, the projected cost of this team weighs heavily on the resulting ROI. Here is where the focus begins to ensure money spent on development is maximized. Putting the team before the project can be a great approach for success.
| What’s the best way to get an application built?
Building an application for mobile or web can be challenging. For businesses that offer a software product, they typically have an inhouse development team that can manage building a new application. Other companies may have an IT department that has the ability to support the development of an application.
That said, if the company does not have the inhouse talent, they will need to hire a person or partner with an agency to work on said project. Overall each one of these possibilities has a measurable cost to the company. The “best way” will typically be determined by budget, leadership decisions and how quickly the project needs to be completed.
| Working with your internal team.
Having an internal team with the ability to build an application can get an app development project off to a fast start. The challenge then becomes, how are you managing the capacity of the team? By adding a new project the team may require additional resources to ensure they can remain productive with all their current responsibilities. This can translate into hiring new team members or augmenting the workload using an outside resource or agency.
Recognizing this component, you could project a cost to hire a technical person (90K-180K annual) and the cost of hiring an agency (10K - 20K per month). Depending on the length of the project, you can add the appropriate cost by understanding the estimated time it may take to complete.
| Working with an agency group.
In some cases it makes sense to hire an agency to complete your project. Other projects may be well suited to complete with internal teams. Let’s compare working with an internal team or working with an agency to - doing home improvement yourself or hiring a professional to complete the work.
There are two main ways to hire a professional team (agency) to support a project. One is to augment your team to add support and/or a skill set that your internal team does not have (hiring a plumber to fix your pipes). The second would be to hire the professional team to build the entire project from start to finish (hiring a builder to build the whole house). Both of these methods have costs associated with them that could range anywhere from 30K - 150K (and higher even) depending on the scope and length of the project.
The point to recognize here is that hiring one full time employee is very similar to paying an agency for a project that could run from 3 to 18 months. We must then consider other additional benefits of working with an agency. Some of the most compelling would be level of expertise, similar successful project experience, start date, communication style and steady work flow of deliverables.
| Reflections on how to choose which way to work.
To make the best choice to use your internal team or work with an outside agency it is worth considering these three areas; team project capacity, scope and length of the project. Having a good handle on defining these elements can support keeping the project delivery schedule on time and on budget. Similar to how a rocket ship prepares to blast off, the better the rocket is aimed, the more likely you are to hit your target.
Based on the cost outlined above, it becomes clear that there can be an equal cost between internal and external app development teams. Whether you’re augmenting a project or having one built from beginning to end, it’s worth considering working with an agency at the start of every project. Even the act of connecting with an agency to discuss the possibility can add value to the decision of the best way to move forward for your team.
Additionally, bringing on a team of developers that have completed projects in the past, can and will provide great insights and help you avoid pitfalls. With good communication and senior level staff, agency developers have seen many mistakes and are always happy to share options for the success of the project (or at least they should).
AppTailors is a true proponent of incorporating a high level of communication through the development process. It is our experience that the success rate of an application increases when you can help clients better understand the end user, consider and the reasoning behind investing and remain open to talking through any questions.
Although there are areas for expansion in this article, hopefully there was something in here that you can take away. Always appreciate feedback and it would mean the world to us if you would share this article through your network!
-Best of luck!
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