App development costs: we explain it!

It makes sense to want an estimate of the costs before you start developing an app. Still, it is hard to give an accurate estimate without first having a clear picture of what the app needs. In this blog we discuss the main factors that influence the cost of app development, so you can get a better sense of what to expect.

9 factors that determine the cost of app development

Several elements influence the final cost of an app for your organization. Below we cover 9 of the most important factors, including concrete examples.

Platform choice and development tool: high-code vs. low-code

High code: This is the traditional way of developing, where software engineers build applications using complex code. Developing applications with high-code often takes more time and requires staff with specialist knowledge. This often means less flexibility and higher costs. High-code is often chosen for apps with very specific requirements.

Low-code: This uses visual development environments that allow apps to be built faster. As a result, development time and costs drop considerably. Today, low-code is ideal for almost any business application.

Example: An internal business application can often be built faster and cheaper with low-code, whereas a fintech app for banks is more likely to require high-code because of complex regulations.

2. Licenses: fixed vs. variable

Fixed licenses: This means a predictable cost structure, usually applicable to SaaS solutions. It can be attractive if you want to keep control over costs.

Variable licenses: Here the costs are based on the number of users, usage or other factors. This is often used with scalable platforms.

Example: An app used by thousands of external customers may require a variable license model, whereas an internal app for a small team is often fine with a fixed license. It is therefore important to make a realistic estimate of the (potential) number of users up front, so you can choose the license model that best fits the scale and use of your app.

3. Hosting: self-hosting vs. cloud solutions

Self-hosting: This gives you more control over your own data, but it also requires more technical knowledge and a large investment in hardware. It suits companies that process sensitive information.

Cloud hosting: Cloud solutions such as Azure, AWS or Mendix Cloud offer scalability and lower start-up costs. This is especially useful for organizations that are growing fast and want to scale up (later).

Example: An app for business-critical processes in the financial sector may require self-hosting so that you keep full control of the data, whereas an order processing application can run perfectly well in the cloud.

4. Number of screens and complexity

Few screens: Screens within an app are comparable to pages on a website. The fewer screens you need, the less development time is required. This often results in a pleasant user experience and lower costs.

Many screens/pages: When an app has many screens, complexity increases. This means more attention is needed for the design, for how users can navigate through the app easily, and for testing the app. As a result, development time goes up, and so do the costs.

Example: An inventory app helps you manage stock and automate inventory management. Think of tracking products in a warehouse, materials on a construction site or office supplies within an organization. A simple inventory app with five screens can offer basic functionality, such as entering items, viewing stock, adjusting quantities, a search function and an overview screen. Because the number of screens is limited, development time and costs stay low.

When an inventory app needs to be more extensive, for example with user roles (different permissions for warehouse staff and managers), low-stock notifications or extensive reporting, the app becomes more complex. This requires more development time, more extensive testing and a well-considered design, which ultimately increases the costs.

5. UI/UX requirements: standard vs. custom

Standard components: These are available elements that are quick to use. They come with lower costs, but adding customization (for a better user experience) is not possible here.

Custom UI/UX: Specially designed components that match your brand experience take more time and therefore a larger investment of resources.

Example: A standard login screen costs less than a fully personalized interface with interactive animations.

6. Database complexity

Simple tables: You can use these tables for basic data without complex relationships. This is suitable for simple apps.

Advanced databases: Relationships between multiple entities, data integration and security call for a more extensive database.

Example: An app that stores customer data in a simple table is cheaper than an app that has to support multiple tables, relationships and hierarchies.

7. Integrations and connections

No integrations: Stand-alone apps that run independently and contain less complex logic are generally faster to develop.

Complex integrations: Connections with external APIs, CRM systems or ERP packages increase complexity and costs.

Example: An internal app without integrations costs less than an app that communicates with external data sources, such as a web shop or financial systems.

8. User stories and functionality

Basic functionality: An application with limited interactions and functionality that is simple to build is less expensive and often needs less maintenance as well.

Advanced functionality: Functionality such as AI, reporting, notifications and advanced security calls for custom work and extensive testing phases.

Example: A task management app is meant to help users organize, assign and track tasks. This can range from simple checklists for ticking off personal tasks to shared task lists for small teams. Users can quickly see what needs to be done, set priorities and mark tasks as completed.

Simple task management apps are often clear and contain few screens, which keeps development costs relatively low. This contrasts with more complex project management apps that offer extensive reporting, notifications and automated workflows to support larger teams.

9. Maintenance and support

Self-sufficiency: Your own IT team manages the app, which can save costs.

Full support: Support from a development team for maintenance, updates and technical issues.

Example: An app for internal staff can often do without extensive support, whereas a customer-facing app with a large number of users needs more support.

Costs versus benefits of developing an app

Organizations develop an app for various reasons and to achieve different goals. Possible goals include:

• Saving time by organizing processes more efficiently, so that, for example, administrative tasks take less time.
• A better and more up-to-date overview of crucial information such as stock, reservations, orders and sales figures.
• The ability to handle important and frequently recurring processes more smartly, such as processing orders, sending messages and storing data.
• Developing an app as an accessible service or sales channel for customers.

When developing an application, people often look at the costs right away, but not at how much money and time can be saved in the long run by digitalizing. In the long term you often save a lot of time and money, fewer mistakes are made and processes run much more smoothly.

The biggest impact comes when an app supports an essential process within your organization. In that case there is a good chance that the app genuinely adds value, pays for itself quickly and justifies the investment. The precise goals and possibilities depend heavily on the specific needs of your organization.