Fundamental App Development Outsourcing Pricing Models to Consider

• By Emma Hazel
• 29-03-2023
• Mobile App Development

Infrastructure

It will be necessary for you to arrange space and facilities for your in-house team to sit in your office and perform their work in a healthy working environment if you are going to develop your app in-house. If you have limited office space in your office or if you have space but plan to increase the size of your existing team in the future, making a developer's team will only burden your office with infrastructure and might force you to move to a new office if you ever want to expand your team.

Financial Burden

Building an in-house team of software developers involves big investments in terms of space and facilities for your team. After that, you have to spend money on recruiting them. Following the recruitment process, you need to provide many additional employee benefits beyond the monthly salary of your team members. Aside from that, you'll have to increase their salary every six months or every year according to the appointment letter's terms and conditions.

Recruitment

Choosing the right technology and team size is only the beginning of the real challenge - finding the right technology experts to meet your expectations. In order to attract the best-performing talents in the industry, you must provide them with an exciting job offer, otherwise, they will not join your organization. On the other hand, if you choose average talent, you must ensure that they are able to meet your expectations, otherwise, their hiring will only cause delays in the delivery of your project. If you hire the wrong person, you will have to restart the hiring process sometime later to find the right replacement. On the other hand, when you hire the top mobile app development company, you get rid of this headache, as your service provider hires the right people in their team to meet your expectations.

Efficiency

Sometimes, even the best teams need assistance from other technology experts. Your in-house experts may also seek consultation from other industry experts to accomplish any particular task efficiently. Each time they find themselves in such a situation, adding a new member to your team will negatively affect your bottom line. On the other hand, when you outsource the job to a mobile app development company, they have experts in all different technologies. Hence, based on requirements, technologists can help one another.

Round-the-Clock Support

Your product is supported 24/7 when you outsource your task to an offshore mobile app development company. Anytime you need support, you can reach out to them, and they can assist you. In contrast, if you hire an in-house team, you will have to wait for working hours if you encounter a problem during odd hours.

So, app development outsourcing is always the best idea.

The right pricing model is equally significant as finding the right provider when outsourcing software development. You need a trustworthy partner with knowledge and experience, the proper attitude, and a healthy company culture to carry out your task in the most professional manner. Your pricing structure must match your organization's work and its needs.
We will explore the most popular IT outsourcing pricing models here and help you choose the most appropriate one for your business needs.

Here are the top Fundamental App Development Outsourcing Pricing Models

• Dedicated Team
• Fixed-Price Plan
• Time & Material Plan

What is Dedicated Team Outsourcing Pricing Model?

Dedicated team models enable you to hire full or part-time dedicated resources without hiring them in-house. App development outsourcing companies build teams of dedicated professionals who work exclusively on your project based on your specific requirements. These professionals know your language and work in your time zone. Thus, language and time zone don't present any problems. You can reach out to your service provider at any time if you feel your dedicated developer isn't meeting your expectations. Therefore, you are assured of the best quality work.

Dedicated team pricing is very transparent and simple. The amount you pay to your service provider depends on how many people you hire. The cost includes salaries for the developers and the fee for the service provider. You receive a dedicated remote team that does not burden infra or financial resources because it is not based in your office. They will work for you for a specific amount of time, then you can downsize your team to one or two professionals to provide support.

Advantages of Choosing Dedicated Team Outsourcing Pricing Model

Contains Agility

The dedicated team pricing model has this exciting benefit. This is the best choice if you have just prepared a plan and expect many changes based on the responses and increasing requirements. A dedicated team of professionals can help you develop a business-friendly product by incorporating your creative ideas and evolving needs. In addition, discussions with your team can let you know how the work is going and what modifications can be made to the existing plan to make your product as strong as possible for a successful market entry.

Development at a Faster Pace

Completing your project faster when you have a dedicated team working on it is easier. This is because you can communicate directly with your dedicated team. They can provide you with their concerns and recommendations. Furthermore, you can also discuss ideas, requirements, expectations, and feedback. The communication between you and your developers ensures the fast development of your project.

A Focused Approach

Because only your projects are theirs for the signed period, your dedicated team works with a focused approach. Thus, they put all their energy into fulfilling your requirements and exceeding your expectations. This concentrated approach will allow you to achieve your goals.

Transparency In Management

When you hire mobile app developers as dedicated developers, you also get time tracking and task management solutions. You can therefore check at any time if your team is working for you in accordance with their commitments or not. Besides, you can ask them to submit daily reports via Slack or other platforms.

Disadvantages of Choosing Dedicated Team Outsourcing Pricing Model

A Bad Idea For Short-Term Projects

The dedicated team pricing model is not a good choice if the project will last less than six months. Hiring a dedicated team with specialists from a mobile app development company will leave them with little to do.

What is a Fixed-Price Model?

A fixed price model refers to a type of work and price agreement between a service provider and a project owner that stipulates how much the service provider will charge for the task. Once your service provider has started working on your project, if you request any changes to the development process, you will need to pay for the additional work you request. Consider this pricing model only if you are sure of what you want and are unlikely to change your requirements or expectations.

Advantages of the Fixed Price Model

Clarity on costs

Outsourcing pricing models with fixed pricing provide cost clarity. App development outsourcing companies know in advance what they will have to do and how much they will be paid. Similarly, you know how much you'll pay for your task.

Peace of Mind

A fixed-price contract eliminates your headaches. It is now your service provider's responsibility to fulfil your requirements. In order to ensure the utmost quality and timely completion, they need to look for the right resources.

Timely delivery

Your mobile app development company knows what they have to deliver since everything is properly discussed and finalized at the beginning of the project. Therefore, they assign your project to developers who are capable of delivering your requirements.

Disadvantages of Fixed Price Model

Service charges are high

Software development companies often charge higher rates when you contact them for a short-term fixed task under a fixed-price model. This is because short-term, fixed-price projects require your service provider to find skilled developers available for short-term assignments. Therefore, prices are high.

No project flexibility

After signing a contract with your mobile app development company, you must keep your requirements the same. Changing your plan requires renegotiation with the service provider and additional costs.

Not Appropriate for Long-term Projects

Fixed-price is never an excellent idea for a long-term project. It may lead to arguments between you and the service provider if you choose it for a long-term project with possible changes.

What is the Time and Material Outsourcing Pricing Model?

It's a pricing model in the app development outsourcing industry in which you pay your service provider only for the resources and time they spend on your project. This pricing model has become an increasingly popular development industry because it gives satisfaction to both parties. As a result, service providers are able to deploy the best resources and invest more time to ensure the best results with this model, resulting in top-notch solutions equipped with cutting-edge technology.

Advantages of Time and Material Outsourcing Pricing Model

Flexibility

Depending on your needs, your service provider deploys different engineers to work on your project when you choose this payment plan. At any point of time, you can change your plan regarding the design of the project and the company will happily accept your changes. As a result, this payment model offers you a high level of flexibility.

Top-Notch Product Quality

Your software development company will hire mobile app developers with exceptional skills to deliver you an outstanding product. The developers take their time to create a product that can streamline your business process and help you stand ahead of the competition. Also, the testing team takes its time to ensure the product is working with its full efficiency and free of bugs and the risks of malware.

Transparency

Since software development companies charge you based on resources and time used on your project, they maintain complete transparency to ensure you must have no doubts about the work and the payment. In addition, they create a system that allows you to check the name of developers and the time they spent on your project to build your trust in their services and charges.

Disadvantages of Time & Material Outsourcing Pricing Model

It May Exceed Your Budget

You may end up spending more than your budget on your project if you choose this pricing model because developers charge based on the amount of time they spend, which means that they might use their time to create something amazing for your company that may produce excellent results, but may cost you more than you expected.

Resulting In A Delayed In Delivery

As the developers work hard to deliver something exceptional that can help you get an edge over your competitors, they spend their time on your project with an idea in their mind. Moreover, your project's requirements and development may be changed based on the new trends in the market. Hence, the product delivery may be delayed.

What Is The Best Pricing Model?

The most popular pricing models are listed here, but we do not recommend any. We instead share the factors you need to consider before making a decision.
The factors to consider are:

The Size of Your Project

Which type of project do you have? Is it short-term or long-term? What is the expected number of developers required for your project?

The Complexity Level It Involves

What is the complexity level of your requirements?

The Probability of Changes in the Product Development Process

Are your requirements fixed? Could your needs and product design change in the future?

Your Affordability

How important is budget to you? Are you able to afford a large investment to develop a cutting-edge product?

The Level of Control You Want on the Development

Would you like to keep track of the team? Would you like the developers to work with you as a team? Are you just looking for your job to be done and nothing else?

The Expected Duration

Are you interested in getting your product delivered as soon as possible, or are you interested in getting the best product, no matter how long it takes?

Asking you these questions and analyzing the mentioned pricing models will help you choose the most appropriate one.
If you are looking for a reliable mobile app development company with a specialized team and affordable pricing models, reach out to us now. The best service at the best price is our assurance!