You probably landed on this article because you want to know how much it costs to develop a mobile app or a web application for your startup. You might have talked to some local agencies and they have quoted you some amount that's going to break the bank.
The short answer the first MVP version of your app can cost anywhere between $15,000 and $50,000. These costs are significantly higher if you work with an agency in Australia.
The long answer is it depends on what your requirements are, how complex the integrations would be and what you want in your first launch.
A list of requirements (also called founder's vision for the project) can be interpreted in many ways. It is critical to align the stakeholders involved in the software project before setting expectations around time and budget.
Aumadi does this through our own process. Specifically, a dedicated stage to align stakeholders, create a requirements document and a clickable prototype so that our developers understand exactly what it is they are building. This allows us to scientifically estimate the requirements and communicate to clients what features impact the cost of their software application.
The very first stage that can often be devalued by those that don’t have industry experience is scoping. As mentioned above, Scoping is how we can more accurately calculate the costs of software development.
The length of time for this process can vary but it is generally between 2 and 4 weeks. Importantly, at the end of Scope, we emerge with a number of deliverables including:
The trap that many software development companies fall into is giving a quote before adequately scoping a project. This is incredibly problematic when the project is in the midst of development and it becomes clear that the developer’s interpretation of requirement X is different to the client’s interpretation of requirement X. Now, the complexity of the project has increased and the development company wants to adds an extra 0 to the end of the initial quote.
The other likely pitfall is that a project may initially consist of 20 requirements. But in the midst of development, the client realises that another 10 requirements are actually needed to satisfy the various user groups. We call this scope creep. Without adequate time to plan and align on the direction of the software, it will inevitably suffer from scope creep.
You would have realised by now that Scoping is critical for not only us as a development company to understand the project but also for the client's to know what to expect in terms of features and development costs for the web or mobile app.
There are two reasons for this. We will describe than separately.
First, software development is expensive in Australia. To begin, let’s start with the average salary for a software developer in Australia. Indeed AU has put this figure at $122,000. That’s a good start but that number isn’t accurate in and of itself. Every organisation needs to add on superannuation (10%), overheads (30%), non-billable staff like Sales & HR (35%). Then all businesses need to have margin which can go upwards of 30%.
Our final equation is $122K + ($122K x 0.1) + ($122K x 0.3) + ($122K x 0.35) + ($122K x 0.3) = Now, we’re looking at a per developer cost of $274,500. Or $5,280 per week (including 4 weeks leave).
A software is not built by a single developer. There would be atleast one more developer, quality assurance or testing team, designers and project/product managers involved in the whole process.
That's why the cost of software development is ridiculous if you get it done locally. There are other type of agencies who have a front face in Australia but they actually get the work done through outsourcing. You would not even realise this if your contacts in the company are local.
Second possible reason is they probably did not scope your project enough. They just estimated based on your laundry list, added a bigger margin for error and quoted you a safe amount.
Also, you need to be aware that there are ongoing costs of running and maintaining a software. So this is not a one time payment. You will have to suffer these high costs throughout the lifecycle of your product.
Sure, you might have heard of some stories in your circle about things not working out offshore. Or a local agency might have scared you about IP issues and other horrible things going wrong.
There are a few things to consider here. Will break them down below:
Finally, offshoring software development for costs reasons have been going on for last 20-30 years and will continue to happen. Billion dollar organisations have utilised the benefits of this system while getting access to quality software products. Why not a young company like yours?
Here is our other blog discussing the topic of should you go to offshore for your software development in much more detail.
Why not deploy that capital in your other business functions like marketing and operations to scale the business?
Reach out to us if you would like to know more please book a 30min (no obligation) chat with us.
