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Outsourcing Mobile App Development in 2021: Reasons, Costs, Process

19 min read

In order to start a successful startup, you need to get to market as soon as possible.

Hiring a dedicated team of in-house developers will not only cost thousands of dollars, it will also be time-consuming.

A working alternative is to outsource mobile app development.

That’s why we’ve written a detailed guide on how to outsource mobile app development in the right way. You’ll learn about:

  • What is outsourcing,
  • What are the reasons and business benefits of outsourcing,
  • Why the outsourcing model is so popular,
  • How to choose a trusted app development company,
  • and more.

Without further ado, let’s get down to business.

If you prefer visual to text, then go straight to the bonus infographic “Outsourcing mobile app development in 2021”.

What Is Outsourcing Mobile App Development?

Hiring a third-party agency to develop your mobile app is called outsourcing mobile app development.

There are multiple models of outsourcing that businesses adopt, but offshore and nearshore outsourcing are the two major categories.

Offshore outsourcing refers to opting for an outsourcing partner in a foreign country. Most companies in developed countries like the US and Canada outsource using this model.

They hire agencies in developing countries where rates are lower. Ukraine, Mexico or India, and other developing countries are on top of the list. Hence such companies can save a lot of time and money.

Apart from saving time and money, there are multiple reasons why you should outsource app development. Which ones?

On this picture you can see 2 main types of outsourcing to choose from, when thinking to outsource mobile app development

Why Should You Outsource App Development?

Here, we’ve enlisted the reasons you should opt for getting your mobile app developed by an external app development team instead of hiring an in-house team.

You should opt for getting your app development outsourced because:

  1. The app development process will be less time-consuming.
  2. The development will be much cheaper.
  3. It is feasible for small startups and businesses.
  4. It often results in high-quality products.
  5. It helps you focus on the core business functions.
  6. It will help you hire international talent and not rely on nearshore talent only.

Apart from these, you get numerous other benefits if you decide to go with an outsourcing partner for your mobile app development.

The illustration shows the main reasons why you need to get into outsource app development now

The Benefits of Outsourcing Mobile App Development

Let’s talk about the benefits that you’ll get if you choose an outsourced mobile app development company over an in-house team.

1. Affordable and Fast

If you decide to outsource your mobile app development to an agency, the first benefit will be to save a lot of time.

Recruiting an in-house team is a time-taking process.  It sometimes takes months.

And, finding the right team member for you will be even more difficult.

You will have to consider the personality traits, work ethic and behavior, and many other aspects before hiring.

On the other hand, if you decide to outsource the development, you only have to find a reliable partner.

The agency will take care of everything and make the whole process a lot more simple. Let’s find out why.

The illustration shows one of the advantages of outsourcing is affordable and fast development in contrast to hiring in-house team

2. Agencies Are a One-Stop Solution

Sometimes your business needs both the native Android app and the native iOS app at the same time. It will be a hell of a struggle to hire both types of mobile app developers.

In this case, the agency is a one-stop solution. It already has native development teams of developers ready to start working on your app as soon as possible.

Moreover, here you’ll be able to find the full-service:

  • Business analysis and creation of specification
  • UX/UI design
  • Both backend and frontend development
  • And digital marketing as well

And the list does not end at the accessibility of services.

The illustration shows second of the advantages of outsourcing is that agencies cover full-cycle design, development, and maintenance services

3. Quality of the Final Product

The product that an experienced agency develops will be of premium quality. The reason is a large number of similar projects under their belt.

The experience and skills enable such agencies to design and develop products loved by the audiences. The reason is the same, as technical solutions straightly connected with the growth of the business expertise.

The illustration shows third of the advantages of outsourcing is high product quality

4. Lets You Focus On the Core Business

If you spend your energy and time on developing the app, who will do the other stuff?

A startup does not succeed based on the product but based on its values and strategies.

You should work on marketing, customer research, financing, and other business-related issues.

These are the factors that make or break your business.

Even though the product is of utmost importance, it should target the right market, and the business should have proper financial management.

The illustration shows fourth of the advantages of outsourcing is that it lets you focus on core business tasks

How to Outsource Mobile App Development?

How to Find Outsourced App Developers?

We are rooting for an outsourcing team because this is a system where you will get access to an entire team at cost-effective prices.

There are five options for finding an agency:

  • Search on Google
  • Find an agency from listings
  • Look towards the freelance platforms
  • Leverage the networking power of LinkedIn
  • Get recommendations

1. Search on Google

Your initial searches will be the “cost of MVP development”, “cost of app design” or “how much does it cost to build an app”.

All these questions will have billions of results on Google SERPs, but the key is you shouldn’t go beyond the first.

Search for different terms, including application development and outsourcing.

Find out how the service providers have listed their:

  • Key features/functionality
  • Shares information on the blog as well as their website.

Take a look at how your potential service providers have organized their information.

Not only that but also check out how they have written the information and designed their website.

While searching through the SERPs, have a set of conditions in your mind.

This will help you filter out agencies to outsource mobile app development.

Look for a company that shares the same set of values as you and wants to reflect the same in your product.

To outsource mobile app development means you have to find the proper organization that resembles your offerings.

You may also need to look at their costs, team composition, and past projects.

In other words, vet the potential development agency before outsourcing your application development.

A start point to find a partner for application development outsourcing is to use Google

2. Look at the Listings

Websites like Clutch, GoodFirms, Bloomberg, and others will help you find the best software development agency for outsourcing.

They share the best organizations based on different sets of parameters.

You may find agencies listed based on:

  • Their cost of operation,
  • Rankings,
  • The number of projects developed,
  • and so on.

If needed, change the search variables.

This will help find the right type of software development company to outsource your mobile app development work.

Look for the service they offer, similar projects that they’ve done in the past, and their expertise.

Application outsourcing requires the founder to resonate with the development team.

You also need to understand their market value in terms of mobile development outsourcing.

For this:

  • Gather social proof by visiting their social media handles.
  • Look at the posts they have published along with the reviews and comments.
  • Look for reviews on the listing websites and Google.

Listings are also good places to find a partner for mobile development outsourcing

3. Search on Freelance Platforms

Freelance platforms like Upwork, Fiverr, Toptal, and others have a large repository of individual freelancers.

They also have teams who are ready for mobile development work via outsourcing.

However, there is a caveat attached to finding the required personnel for application development or an outsourcing firm from freelancer platforms.

You need to be adept with the concepts of development yourself before moving ahead with this option.

For instance, you should know about the app design process or stages of app development.

Also, it will be helpful to understand how to find and hire developers with this method.

Knowing these things will make you a better recruiter.

It will also help with outsourcing mobile development work easier and make you good at negotiating the cost of hiring.

For the full mobile application development outsource process, make sure to read till the end of this guide.

We will talk about everything related to application development outsourcing in the following chapters.

Third option to find a partner for application development outsourcing is to use freelance marketplaces

4. Use LinkedIn to Find the Right People

LinkedIn is a professional social networking channel.

Here, you will find the contact information of a large number of developers and designers.

The best part about this platform is that you won’t have to chase the people, but they will contact you for work.

To outsource your mobile app development world from LinkedIn, follow a few things:

  • Grab attention: While posting your requirements, mention mutual connections.
  • Conversational Posting: Make sure that your tone of job post is conversational and not too professional. Talk to people and stay human.
  • Review Profiles: Review the profiles of the people who respond to your job post. Check their LinkedIn profiles to gather social proof.

Once you have a list of potential people, share your ideas with them.

Keep in mind that LinkedIn is a professional network.

So your requirement sharing has to match your narrative.

Use specific data about your app idea that you have generated and share whitepapers of the product.

This will give the developers a better idea of the work.

Using LinkedIn isn't easy, but also a good option to find a team to outsource mobile app development

5. Get Recommendations

When you start a startup, your friends, relatives, colleagues, and family become a source of inspiration and consultation.

We want you to use your ties with everyone you know and ask them for recommendations.

Word of mouth is still the most powerful tool of persuasion.

92% of the customers trust their friends and relatives over other media sources.

So, when you are searching for people to outsource mobile app development, ask your network first.

If they have worked with a group of freelancers or an agency before, they will let you know and give an unfiltered review.

These are the five ways to find an agency or freelancers for mobile app development outsourcing.

It is better if you keep your focus on choosing an agency.

This is because an agency is approachable and you will get access to a wide talent pool under one roof.

This reduces management woes and makes communication easier.

Use proven team from recommendations is the most trustful option of mobile development outsourcing

How to Choose an Outsourcing App Development Company?

Outsourcing application development can boost your work.

But it is only possible if you get your hands on the right agency for application development outsourcing.

Make sure to shortlist the potential agencies before you can outsource mobile app development.

We recommend that you look at three things before outsourcing application development.

1. Potential to Help You Succeed

There is no measure to determine an agency’s potential but we want you to leverage your skills as a businessperson.

Listen to your gut feeling when it comes to an understanding the potential.

You might have heard people say that you should look at the facts. Or something like data speaks best. All of these are true and relevant.

But sometimes, our understanding of something via a gut feeling outruns all the data and metrics.

So, we want you to observe the potential service provider closely.

Rank them in terms of helping you create the right product. To do this, you can take help from two things: communication and customer reviews.

Communication plays a major role in outsourcing your application development work.

When you talk to the service providers, their communication needs to be legible and clear. This includes the understanding of the concepts and the tasks needed to complete the work.

Another way is to look at customer reviews. For this, look at the social proof at the agency’s social media accounts. You can also check:

  • LinkedIn,
  • Their website,
  • Other listing websites like Clutch, Good firms, etc.

2. Expertise

Any outsourcing agency can list out the application development services they provide on their website. Writing about them is one thing and actually delivering that is different.

You might come across agencies that promise to deliver a food ordering app with proficiency.  But you should not just go with what they have to say.

Another way to look at their expertise is by looking at their case studies.  Case studies help you with two things:;

  • Identify the agency’s work experience via past experience.
  • Help you in finding their ability to deliver the product corresponding to the set of requirements.

Let’s say that you find a case study on the agency’s website where they have made a clone of an app like TikTok or Uber.

It would be great to explore the requirements and way developers have worked on it. Do this before you move forward with outsourcing software development.

3. Cost of Services

This might be one of the most important aspects to look at for mobile development outsourcing.

Application development outsourcing agencies must be judged on multiple parameters:

  • Expertise
  • Services delivery
  • Potential
  • Team composition
  • Cost

We put cost last because if all the other variables are suitable, the charge is justifiable.

Some companies want to get paid on an hourly basis, while others prefer fixed price rates.  Some want to get paid upfront, and some are good with getting paid afterwards.

Let’s take a look at a spreadsheet with 3 critical factors of pricing.

Factors Description
Cost by region For example, a company from the USA, the UK, and Western Europe will charge higher than their counterparts in Eastern Europe, Latin America, and South Asia.
Cost by business needs For example, for iOS app development, you will hire Swift developers.

But if the tasks change and you’ll need an Android app, you will have to look for and hire Kotlin developers separately.

But it is possible to save budget by hiring React Native or Flutter developers.

Cost by complexity For example, if you need a web app and a mobile app, the costs will be higher.

The complexity of the app also plays a significant role. If it is a complex app, it is going to be expensive.

The costs of mobile development outsourcing cover:

  • Creating a draft
  • Mockup or Prototype
  • Development
  • Testing
  • Deployment

Some agencies might also help you with startup marketing. This may increase the final cost too.

But you won’t have to worry about creating ad campaigns or running complex strategies to promote your product.

The next step in application development outsourcing is understanding the agency’s workflow.

 The illustration shows what factors affect the cost of outsourcing mobile app services

What Is the Process of an Outsourced Development of a Mobile Application?

As a newbie, it is essential to understand the process.

This workflow has helped us successfully deliver projects while keeping in mind the cost of mobile app development.

There are three streams to the mobile app development workflow that every outsource agency must follow:

  • The planning phase,
  • The development phase,
  • And the maintenance phase.

The Planning Phase

Pre-development implies the activities and tasks you must expect your outsourced agency to cover before the development work begins.

For example, we cover three things under this part of the job.

Part of the Job What Do We Do?
Initial Interview This is the part of the job where you must talk to the agency that takes on the task.

The motive is to:

  • Understand their expertise
  • Check the level of communication.

While covering this step, you must also share your perspective and requirements.

Set your expectations straight, and then work on judging whether or not the agency can deliver on that.

Ask questions related to:

  • Expertise
  • Experience
  • Development team
  • Project management practices
  • Designing and implementation
  • Deployment
  • marketing

The motive is to understand how the potential agency will work when you outsource mobile app development.

Rough Estimate Knowing the cost is also essential.

This way, you can start planning your budget.

The cost to outsource mobile app development depends on the documentation and the design.

Note that, at this stage, everything is on a rough piece of paper.

So the final cost of designing and mobile outsourcing development can change.

You must be prepared to share:

  • Rough documentation
  • Rough UX

The documentation includes:

  • Application idea
  • Requirements
  • Customer preferences
  • Target audience

The rough UX is the idea of the design of the application.

This includes the screens, their layout, button placement, among other things.

Either prepare a rough sketch of the application that you want.

Or ask the outsourcing mobile app development agency for the same.

Signing an NDA This is one of the biggest mistakes that new founders make while outsourcing application development.

In a competitive world, the one who has the idea and delivers the product first has more benefits.

A Non-Disclosure Agreement restricts the agency from sharing information about your product with any other entity.

Violation of the NDA makes the agency liable to pay for any damages.

Pre-development stage is very important for application development outsourcing. Here you can see the deliverables.

The second set of activities in the pre-development phase talks about five major steps of mobile development outsourcing:

  • Detailed Interviews
  • Documentation
  • UX Design
  • Tech Solutions
  • Detailed Estimate
What To Do and Expect? Its Importance
Detailed Interviews The initial interviews were more of an introductory round.

These are the detailed interviews.

You have to ask everything about application development outsourcing in detail:

  • Get to the depth of what needs to be done.
  • If possible, get in touch with the development and design team.
  • Talk about everything in detail.
  • Understand how your mobile development outsourcing agency will deliver the work.
  • What sort of technologies they will use.

It will be great to look at four variables for the interview:

  • Professionalism
  • Efficiency
  • Experience
  • Client Well-being

After analyzing the agency on these aspects, you can move forward with the other ones.

Documentation The documentation part includes:

  • Building the drafts
  • Prototypes

Other than this, it also includes the details about the application.

Initially, it will help the developers understand the product.

Later on, the same document with some modifications will be a tool for customer support executives.

Helping them understand how it works and assist customers do the same.

UX Design User Experience is one of the most important parts of mobile development.

Outsourcing your work must be done to an agency that understands its role in application development successfully.

Without effective UX designing the application will not work as per the customer expectations.

So, the outsourcing company working on your application development must:

  • Understand the role of UX design.
  • Use the right set of tools to ideate and create the designs.
  • Leverage the target platform’s abilities to create better designs.
  • Create interactive and intuitive designs based on customer preferences.
Tech Solutions This is the part where the application development outsourcing agency needs to provide a list of tech stack.

Tech stack implies the planning, designing, and development of technologies or tools required.

Not all development tools are apt to build every type of application.

Depending on your requirements and product, you must ask for the relevant tech stack.

Detailed Estimate If and when all the above-written requirements are good to go, you can ask for a detailed estimate.

This will include listing out the cost and time required to build every part of the application.

The application development outsourcing agency must provide a detailed estimate.

Ask the mobile development outsourcing agency to send a complete list of the features.

Ask them to include the hours required to build them.

Segregate list into designing, frontend, backend, DevOps, project management, and business analysis.

Because until this point, no coding has started, you can always switch to another agency if required.

Once you have the list of steps and a detailed estimate, the development begins.

The advanced level of plannin stage defines how development will go on outsource mobile app development

The Development Phase

The flexibility of the work scope and revisions is one of the greatest benefits of in-house development.

With outsourcing of application development, most companies will have a limit of revisions and feedback rounds.

Any changes in the requirements and constant feedback will increase the cost.

In-house development offers a countless number of tweaks at no extra cost.

That is when you outsource mobile app development, look for the agencies that follow three practices.

Practices To Follow Meaning and Scope 
Agile Management Agile application development means using an iterative approach.

In other words, this is a practice where:

  • Developers build something.
  • They get customer feedback.
  • The changes are taken into account and realized in the product.

Due to an iterative approach, you can build a customer-centric platform.

Constant Communication While developing the application the outsourcing agency must also make an effort to:

  • Communicate
  • Share the work
  • Give demos

Not communicating with each other leaves out more scope for inconsistent development.

Furthermore, a mobile app development outsourcing agency that does not communicate is not a good partner.

So, while taking interviews, you must fix a schedule for communicating with each other.

Constant Demos This must be a part of your agreement with the mobile app development agency to whom you outsource.

Providing constant demos strengthens agile management practices.

Not only this, while getting demos, you can carefully examine the application and suggest changes.

The last part of the workflow is marketing.

Now not all agencies will have a marketing team.

But prefer outsourcing application development to agencies that also provide marketing services.

Ok, now that you know how to develop an application, let’s talk about the cost of development.

Illustration shows the quick recap of development phase when you cooperate with outsource app development agency

How Much Does It Cost to Hire a Team of App Developers? [Comparison Spreadsheet]

To quickly get you up to speed on the comparative cost of mobile app development, let’s take a look at the table. We’re talking about a hybrid app that took 1000 hours of development.

Type of team Average cost
In-house team in the US $110,000
Local agency in the US $150,000
Freelancers in South Asia $40,000
Outsource agency in Ukraine $60,000

Various factors determine the cost of outsourcing application development. This includes:

  • Project management,
  • Business analysis,
  • UX/UI design,
  • Mobile development,
  • Backend development,
  • QA testing,
  • DevOps,
  • Maintenance.

The most common method of application development outsourcing cost is “by the hour.” Developers and designers charge you an hourly rate based on the hours they spend developing your app.

To understand the cost calculation, you need to know the players of your dream team:

  1. UX/ UI Designer
  2. Project Manager
  3. Backend Developer
  4. Frontend Developer
  5. QA Tester

We have also talked about business analysis and marketing in the process.

Plus, there is another person that you may require, Chief Technical Officer (CTO).

But, we won’t be listing out the cost of hiring them below.

Here are 4 case scenarios:

  1. Hire an in-house team
  2. Work with local based agency
  3. Outsource mobile app development
  4. Hire freelancers

Based on the team composition, here is a cost analysis for these 4 methodologies that help you compare outsourcing development cost-saving.

The illustration shows what affects the cost of outsourced application development

Option 1. Hire an In-House Team [To Compare]

The cost to hire a team will depend on the salaries the team members will receive.

Here are estimates from Glassdoor, Salary.com, and PayScale.

  • Designer: $85,000 per year
  • Project Manager: $89,000 per year
  • Backend Developer: $77,500 per year
  • Frontend Developer: $119,000 per year
  • QA Tester: $58,000 per year

These are the average salaries.

The final cost of hiring may depend on the experience and expertise the person brings to the table.

Pros Cons
  • An in-house team is one of the most efficient teams to hire.
  • You will get an unlimited number of iterations and reworks.
  • There won’t be any communication gap.
  • Easy management.
  • The high cost of development.
  • Compliances and regulations must be followed.

Should you choose this, you will be able to develop a fantastic product.  But it will come at a high cost.  And during the initial stages of starting a business, you must work on cost savings.

Option 2. Hire Local US-based Agency [To Compare]

A US-based agency means that you will get to work with a team situated in your time zone.  The guys in the team will relate to your work, idea, and scope of work with more confidence.

When you start mobile app development, you will end up paying for an hour’s work. As the number of hours increases, the cost also climbs.

The per-hour prices of hiring developers and designers in North America have an average of $150 per hour. So to build your mobile app in the US for a 1000 hour project, you will spend $150,000.

Pros Cons
  • Local agency means there won’t be a communication issue.
  • You will work with experienced developers.
  • Receive a high-quality product.
  • The high cost of development.

Should you choose this, the mobile development outsourcing cost will be high.

Option 3. Hire Team of Freelancers

Choosing freelancers from a global talent pool can help you save in terms of cost.

Platforms like Upwork, Toptal, and others have a large repository of developers.

While choosing freelancers to work with you, make sure to vet them.

Ask for their experience, GitHub accounts, and projects they have done, and testimonials/feedback from their previous clients.

The average cost to hire freelance developers and designers falls between $20 to $40 per hour.

This means that you may have to pay between $20,000 to $40,000 for a 1000-hour project.

Pros Cons
  • Low development cost
  • Ability to negotiate the prices
  • Managing freelancers and getting work reports is a daunting task
  • There are a lot of differences in the time zones leading to communication errors.

Should you choose this, be prepared to put in an extended number of hours for management.

Plus, freelancer’s quality of work cannot be verified and not everyone will be able to communicate efficiently.

Option 4. Hire an Outsourcing Agency

Outsource to the Indian Team

As a part of application development and outsourcing, India is on a leading frontier.

The average hourly price ranges between $15 to $30.

The reason for this is high competition and lower labor costs.

Pros Cons
  • Low development cost.
  • Easy access to several agencies.
  • Indian agencies are known to provide low-quality applications.
  • There are concerns with project management and communication.

Should you choose this, make sure to run a complete verification of the agency to whom you outsource mobile app development. Also, sign an NDA.

Outsource to the Latin American Team

The Latin American mobile development outsourcing market is relatively new and growing.

This does not mean that the developers and designers here are new.

But the application development outsourcing model is new to them.

That is why they charge between $20 to $40 per hour.

This makes the total cost of app development outsourcing between $20,000 to $40,000 for a 1000-hour long project.

Pros Cons
  • New market means you have the higher ground to negotiate.
  • Developers will be motivated to work and provide quality.
  • These developers may not have a full understanding of the market.
  • Project management and communication issues may arise.

If you choose this, prep yourself to train the agency or development team to navigate the process.

You may have to spend more time working than usual.

Outsource to the Ukrainian team

Ukrainians are avid developers and known across the globe to create great products.

The average cost to hire a team from Ukraine is between $30 to $50.

So, to outsource mobile app development to these guys means you will be between $30,000 to $50,000.

Pros Cons
  • Low cost of outsourcing application development.
  • They are avid English speakers, so you won’t have communication problems.
  • Experienced agencies have dedicated project managers to take care of your needs and ensure 24/7 contact.
  • A huge number of developers means choosing the right one is a complex task.

Should you choose this, you will get an amazing product at cost-effective prices.

Mobile development outsourcing agencies in Ukraine also have dedicated marketers on their teams.

This makes your search for a separate marketing team redundant.

Now you have a complete guide on outsourcing mobile app development in a great way to save on costs and your time.

You can devote the extra resources on your hands to focus on other parts of business development.

We have also listed out different teams and types to choose from along with their costs.

If you want to talk more about your project and how we can help you build an app, read further.

The illustration shows what the options are for developing an application comparing in-house and outsource options

Bonus Infographic

Here you’ll find a summary of our in-depth guide. Learn the highlights how outsourcing mobile app development.

The illustration shows the main material of the article outsourcing mobile app development in 2021 in one picture

Interested to Find a Reliable Partner

SpdLoad is based in Ukraine and has been helping founders and business owners build products of their dreams for years.

We are experts in creating high-performing applications from scratch. As an example of our expertise, we would ask you to look at one of our works, MyWishApp.

The client asked us to build a complex application with multiple touchpoints and a huge data collection.  It helps curate gift lists for the user’s contacts and to scrape data from any website on the Web.

After 2050 hours and 12 people working together, we built an application that is setting new trends in the market.

If you’re interested in reliable mobile app development outsourcing, we are here for you.

Interested to develop your own application?

Contact us. We'll be happy to share our expertise in developing startups from scratch. You'll get a project estimate in the next 24 hours.

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