In the booming world of technology, mobile and web applications have become essential for businesses seeking to reach wider audiences and thrive in the digital landscape. Selecting the right development team is a decision that can significantly impact your project’s cost, timeline, and overall success. The debate between hiring local developers and outsourcing your project often concerns cost. Let’s delve into the factors influencing the expenses involved and provide insights to help you make an informed choice.

Understanding App Development Costs

Before we dive into local vs. outsourcing comparisons, here’s a breakdown of typical cost components in app development:

  • Planning: This stage covers refining your idea, conducting market research, and experimenting with different UI/UX components you may want to add.
  • Design: This stage includes wireframing and prototyping on tools like Marvel
  • Development: The heart of the project, where developers code features, implement database structures, and ensure functionality.
  • Testing and Quality Assurance: Meticulous testing, including functional, performance, and security testing, ensures your app is bug-free and delivers exceptional user experience.
  • Deployment: Launching the app in app stores (e.g., Apple App Store, Google Play Store) and web servers.
  • Project Management: Overseeing the entire process, coordinating the team, and managing timelines and budgets.
  • Maintenance and Updates: This includes ongoing support, bug fixes, new feature additions, and updates in line with OS changes.

Hiring Local App Developers

Hiring local developers offers distinct advantages but generally comes with higher associated costs.

Pros:

  • Face-to-Face Communication: Direct collaboration facilitates clear communication and quick issue resolution especially if you are in the same town as your developer
  • Cultural Alignment: Shared cultural context streamlines workflow and minimizes miscommunications.
  • Time Zone Similarities: Real-time collaboration is often easier due to overlapping work hours.
  • Potential for On-Site Collaboration: The option for developers to work in your office can foster stronger team dynamics.

Cons:

  • Higher Costs: Salaries for developers in countries like the USA tend to be significantly higher than in developing regions ($80,000-$150,000 is a pretty typical salary for an average middle tier city)ย 
  • Limited Talent Pool: Finding the perfect fit locally might be challenging depending on your location and specific technical needs.
  • Overhead Expenses: Office space, equipment, benefits, and taxes contribute to increased overall costs.

Outsourcing App Development

Outsourcing to countries with lower overall costs can be a budget-friendly alternative for your app development needs.

Pros:

  • Cost Savings: Significant cost reductions thanks to lower salaries in countries like India, Eastern Europe, and Southeast Asia.
  • Access to Global Talent: Expand your search for niche technical skills and highly specialized developers that may be harder to find if yo were just looking in once city
  • Scalability: Easily scale your development team up or down based on project needs.
  • Focus on Core Business: Outsourcing frees up your internal resources for core business operations.

Cons:

  • Communication Challenges: Language barriers and time zone differences can hinder effective communication.
  • Cultural Differences: Misaligned perspectives and work styles might need to be clarified. Itโ€™s very common in many countries where the developer will say โ€œYes I understandโ€ but in the background, they are just rewatching a video recording they took or talking to a manager and guessing at what you were looking for them to do.
  • Reduced Control: You may need more direct oversight over the development process compared to local teams. This person is potentially 1,000s of miles away from you with little recourse if things go poorly.
  • Intellectual Property Risk: Protecting your IP requires stronger legal agreements in outsourcing scenarios. Make sure you atleast have a Mutual NDA in place with your developers or agency you use.

 

Hybrid Team App Development: Local & Globalย 

The third option is what we do at Founders Approach where we have US-based Project Managers working in hand with talented global developers to bring your idea to life without compromising on quality or cost.ย We handle the hiring, management, and nearly all of the communication with our overseas team and you can simply communicate with one lead project manager who is most likely in your timezone.ย We do this for a blended rate where we typically come in between $65-$95 per hour depending on the projects needs, goals, and technology requirements.ย 

Pros:

  • Cost Savings: By having a blended rate you can find yourself somewhere in the middle in terms of cost but with a significant decrease to the risk of trying to outsource yourself.
  • No Cultural Differences: We have spent nearly a decade working with outsourced developers so we know what to look for when hiring and managing a developer long-term.
  • Access to Global Talent: Expand your search for niche technical skills and highly specialized developers that may be harder to find if yo were just looking in once city
  • Scalability: Easily scale your development team up or down based on project needs.
  • Focus on Core Business: Outsourcing frees up your internal resources for core business operations.

Cons:

  • Middle Pricing Tier: This still will be more expensive then trying to outsource yourself but without as much risk. A good question to ask yourself is how comfortable are you with late night/weekend management with an overseas team. If you have more time and a willingness to learn potentially doing it yourself can be a good experience.
  • Not Fully In-House: We operate as part of your team but we arenโ€™t 100% in-house so we do still control our own schedules, timelines, etc.

Cost Comparison: Local vs. Outsourcing vs. Hybrid

The cost differential between hiring locally vs. outsourcing can be substantial. Here’s a hypothetical example for a medium-complexity app development project:

Hourly Rates:

  • USA-Based Senior Developer: $100 – $200 per hour as a contractor
  • Outsourced Senior Developer: $30 – $75 per hour as a contractor
  • Hybrid PM & Developer: $65-$95 per hour as a contractor.

When Outsourcing Makes Sense

Outsourcing can be a brilliant choice in these circumstances:

  • Tight Budget: If cost is the primary concern, outsourcing provides access to affordable talent.
  • Standard Technology Stack: If your app requires common technologies (e.g., React Native, Java, Python, PHP), finding skilled outsourced developers is easier.
  • Well-Defined Project Scope: A meticulously planned project is crucial for successful outsourcing.
  • Flexible Timeline: Outsourcing can work well if accommodating some time zone differences is not an issue.
  • Willingness to Learn: There is a lot of risk when doing this yourself so be prepared to waste some money but in exchange you can get a great learning experience.

When Hiring Local Is Preferable

Hiring a local team might be a better fit if:

  • Complex and Innovative Projects: Projects that demand cutting-edge technology or complex features often benefit from close collaboration with a local team.
  • Strict Timelines: If your app needs a rapid turnaround, streamlined communication with a local team might be a deciding factor.
  • High-Security Requirements: When your project handles highly sensitive data, you might opt for the potential additional oversight and control offered by a local team.
  • Frequent Iterations: Having a local team might be more efficient if your project is likely to require frequent changes and adjustments.
  • Launching is a Must: Itโ€™s widely known that when you go abroad itโ€™s very common to have paid 80% of the cost of the project but never actually get your product live. Many overseas teams truly struggle to get the app live. Itโ€™s the hardest part of a project and most overseas teams care most about getting the money up-front and then if the project falls apart itโ€™s okay because they are so far away there is no real recourse.ย 

When Hybrid Models Are Most Effective

In specific scenarios, a blend of local and outsourced developers might be the optimal solution. Consider a hybrid model if:

  • Project Budget is a Concern: This blended rates ensures you can still build your product without compromising on quality or cost
  • Project Management Expertise: Having a local project manager can smoothen communication and processes with an outsourced team.
  • Time-Sensitive Tasks: Local developers can handle time-critical elements while outsourcing more routine ones.
  • Project Budget is a Concern: The blended rate ensures you can still build your product without compromising on quality or cost

This is personally where we fit at Founders Approach and has lead to us launching over 100 projects live for our clients since 2016. We believe our high level of Project Management, communication, and skills working with clients is what creates the best mix for our clients so they can build their dream project without compromising on quality or budget.ย 

If youโ€™d like to get in touch you can reach out on the Contact Us page

Photo by Fotis Fotopoulos on Unsplash