Service-based Project Management

The cost of mobile app development services can vary greatly between countries. Countries such as India, Bangladesh, Pakistan, and the Philippines have among the lowest development costs, while the United States and the United Kingdom have the highest. The reason for this is simple – the cost of human resources in each country.

Although development costs in countries such as India, Bangladesh, and Pakistan may appear to be very lucrative for founders at first, they can pose a number of challenges in the future. In this blog, we will discuss briefly the challenges and risks that you may face when working with a low-cost offshore development company, as well as ways to mitigate those risks.

Because of the increased global penetration of the internet and smartphones, the mobile application development industry has grown rapidly in recent years. Today, approximately 6.648 billion people worldwide use smartphones, accounting for 83.72% of the total population. Countries such as India, Bangladesh, the Philippines, and Pakistan have responded to this rising demand by providing more affordable and cost-effective mobile app development services. There are approximately 32,000 IT companies in India, 4,500 in Bangladesh, and 2,350 in Pakistan. These figures are rapidly increasing due to rising demand, but companies and founders around the world are facing several challenges:

1. Price variations: It is almost certain that if you go with a low-cost vendor for your mobile app development services, the final costs will be much higher than the initially agreed-upon prices. One of the primary causes of this increase is the lack of a clear Scope of Work (SoW) document that lists each and every feature that must be built into the application. Low-cost vendors typically keep the SoW very vague because most founders are non-technical, allowing them to cash in once the project is halfway completed, leaving you with no option to question or change the vendor. Most founders have also noticed that the cost of variation quoted by cheaper vendors is significantly higher than the initial rates offered to hook you in at the start.

2. Low code quality: Hiring newbie/inexperienced software developers is the main strategy that low-cost vendors use to keep operational costs low. Less experienced software developers fresh out of university are very cheap, which means they are most likely learning to code on your project. This implies that the code quality is most likely very low, which may result in a higher number of bugs and issues once the project is launched. Most founders prefer to hand over the code after development so that the project can be maintained in-house. A low code quality would make managing the project extremely difficult for your in-house team. You would have to devote a significant amount of time and effort to improve the code's quality, which would add to the project's costs.

3. Project delivery delays: Having a vague SoW combined with inexperienced developers working on your project can only result in one thing – project delivery delays!!!

It is also important to consider macrotrends in these low-cost developing countries. Opportunities for software developers abound due to the low cost of hiring resources and the high demand for software development. This leads to a very high employee churn rate, in which employees leave their company after gaining some experience to join other firms that offer a slightly better package. Employee turnover in the Indian software industry typically ranges between 15 and 30%, with employees leaving for short periods of time. This is an important consideration because high employee attrition rates may result in multiple developers working on the same project, resulting in a lot of wasted time in knowledge transfer and, ultimately, extended project timelines.

4. Communication gaps: The majority of countries with a cost advantage due to lower human capital are not native English-speaking countries. The issue here is a lack of effective communication between yourself and the vendor, which may result in increased costs, a longer project timeline, and, most importantly, wasted time and effort.

5. Poor testing: Several founders have reported that the quality of mobile apps delivered by low-cost mobile app development vendors is poor, as they contain numerous bugs and inconsistencies that are only discovered after the app has been delivered. To cut costs, most low-cost mobile app development vendors invest very little in test engineers. In order to control costs, they assign additional responsibility to their developers to test the apps. This has a significant impact on project quality because developers do not have enough time to thoroughly test their code due to project deadlines. As a result, you will receive a very poor app and will have to spend your time testing the apps or invest in resources to have the apps tested to ensure the quality of your project.

6. Code handover risks: Most cheap mobile app development companies are hesitant to transfer the final code and credentials with you after project completion (although they might have committed to do so prior to project award). This is to ensure that you are not looking for other vendors to take over the project or develop it in-house for all future features and versions. They would not refuse to transfer the code to you, but they would provide very little to no assistance in understanding their work. Lack of proper documentation exacerbates the problem by making it difficult for a new team to learn the project, making the code handover process even more tedious.

Another factor to consider is the payment terms of offshore vendors, as they typically demand full payment prior to code handover, giving you less bargaining power when considering hiring them.

Another challenge with code handover is the code itself, as you would need to have relevant resources (iOS, Android, Backend, and Front-end developers) on hand to check and ensure that the most recent work is committed or handed over to you.

7. Inadequate after-sales support: It is expected that you will receive timely feedback and resolution to your questions or app fixes while the project is in development and within the warranty period. Most low-cost vendors provide very little aftersales support because it is an additional cost that they prefer to avoid. If bugs or issues are not addressed quickly, your customers may have a negative user experience. Most low-cost vendors are hesitant to offer long-term maintenance contracts because it is more profitable for them to devote their resources to new projects. This may result in your project being left hanging after launch, which is an important factor to consider when selecting your software development partner.

8. Poor business ethics: It is important to note that low-cost mobile app development vendors are likely to have poor business ethics. This could lead to a series of unpleasant encounters throughout the project's development life cycle. This is also important to consider when choosing a vendor because you will be revealing your business idea to them, which poses a risk post-development because they may use the developed code for other projects or customers.

9. Lack of Cloud Competence: Because cloud architects are expensive resources, cheap mobile app development vendors are unlikely to have one at their disposal. Most projects require cloud expertise because it determines the scalability and performance of the mobile application. Furthermore, the cloud architect is responsible for configuring the cloud's security features to ensure that the apps and backend are secure from hackers.