What You Should Know Before Developing a New App: Costs and Considerations

How often have you heard or thought “why does it cost so much to develop an app?”  A better question may be, “what is the cost if we don’t develop one?”

The cost of software development is not inconsequential, but it is the centrifugal force that is transforming agriculture and rapidly becoming table stakes. Agribusinesses, from ag retailers to farm co-ops and service providers, would not shell out tens of thousands to millions of dollars to create custom software, if it did not provide a growth platform and market advantages.

From dirt to paydirt:

Stating the obvious, apps are intended to solve problems. Our most successful software applications were not market disruptors, but repeatedly improved ROI by enabling customers to work faster, with less effort and save money by delivering the following types of benefits:

• Increased speed and efficiencies: A mobile app that can scan a barcode and instantly fill out a digital form knocks minutes off the time it takes to fill out a form, and forms are still ubiquitous throughout agriculture.
• Reduced errors: Manual errors most often require manual corrections that run up administrative costs. Case in point: the previous example.
• Demonstrated value: Is all your data locked up in the cloud? By creating a web portal, customers could see the data in action and add maps and charts that layer site-specific data points they didn’t have. This applies to internal and external customers alike.
• On-demand communication: By adding a communication channel to your mobile app, you serve as their real-time support system in the field. Push notifications and reminders of key events as they happen allow users to take advantage of your services on demand.
• Marketing direction and product validation: That app can multiply its initial value by gathering intelligence on your app’s adoption over time—which features are used most, time spent on the app, or whether an element like a notification feature led them to a new product you just launched—all critical insights for your digital strategy.

Why do apps cost so much?

If you bought 100 shares of Apple stock way back when it was $32 a share, its value today would be about $200,000. If you bought 100 shares of GE about that time, it may be worth less now than what you paid for that Apple stock.

Like financial instruments, the cost of an app depends on how big your investment and how complex they are. Generally, your investment will fall somewhere in these ranges:

• The simplest apps tend to run from $40,000 – $90,000, such as a mobile app that lets a user sign in and see a catalog of items or information.
• Mid-range apps tend to run from $100,000 -$200,000. Usually these involve some additional technical work, such as connecting an app to a website, providing chat functionality, or advanced visualization like 3D maps.
• High-end, complex apps can run above $200,000, often to $1 million or more. These tend to be ERP and technically specific apps (complicated scouting work with GIS, machine learning, or complex interactions) or present a lot of infrastructure needs, such as server setup for data sharing or access control.

Know what your money is buying

What you get for your money depends on a mix of who you hire, their level of experience, the services they offer and their domain knowledge. For agribusiness, we can’t emphasize that last criterion enough. Understanding the farm tech landscape is almost an imperative to develop interoperable software efficiently and effectively.

Here is an overview of the process we follow in providing product development services:

• Discovery phase: $5,000 – $15,000. This first step establishes the project scope and business requirements, creation of wireframes that show components and navigation flow, and documentation of your technical infrastructure and existing software. This determines the estimate for the rest of the project.
• Development of an initial, minimal product with enough structure to validate the value proposition and confirm that the initial design is sufficient.
• Establishment of an agile iterative process for adding features, releasing updates and adjusting to changes in the market.
• Documentation for every level; technical documentation, functional documentation, API documentation, and user documentation. Good documentation helps everyone in the process agree on what should work and why it works that way, minimizing conflict and mismatched expectations.
• Testing, both manual and automated, to ensure the application is free of defects and meets all the requirements.

Breaking down the cost of complexity

The biggest cost factor of any app is the complexity and the amount of technical infrastructure you already have in place. Some factors we consider in evaluating the complexity include:

• Security and Privacy: Enhanced security may mean local data encryption and additional measures like two-factor authentication, which can add anywhere from $20,000 to $40,000.
• User Authentication: Does the app need to know who the users are, and how does it identify them? Perhaps you already have an identity solution for your existing software. In that case, is it configured for Single-Sign-On? There are off-the-shelf authentication systems that can be implemented for $5,000, but a custom solution for a legacy system can run to $50,000.
• Content Management: Is the app self-contained, or does it pull data from a central server somewhere? Is there already a system to author and manage this data, or does it need to be created? An off-the-shelf solution may require $40,000 between the app client and the content management portal; particular customizations for unique media may add $5,000 to $10,000 a pop.

Offline Access:  Can the app always expect an internet connection to be available, or will it need to work in a rural area with no cell coverage?  If your users just need to download data in advance, this may cost as little as $2,000, but if you need a fully featured editing system, the price could run as high as $50,000.

Post-launch costs

Technology is anything but static. Software must be maintained and updated, as you probably know from your own Mac or PC. Your standard maintenance and support contract can include coverage for:

• Bug fixes
• Updating analytics
• Improving stability and performance
• Updating documentation and FAQs
• Adding support for the latest hardware and operating systems
• Maintaining compatibility with third-party services

Shifts in the marketplace can shift development priorities, which can add time and costs to your application project. It is important to balance the need for agility and market responsiveness with clear requirements to drive product development.

The need for agility, however, is a strong argument for an app in itself. Tracking engagement with your clients and employees can allow you to adapt to needs on-the-fly. In order to pivot from priority to priority successfully, you need a strong team with good communication and a solid understanding of your business domain.

Skyward Apps helps ag retailers, co-ops, manufacturers and data service providers build their digital capacity and early market advantage. We create exceptional software, make technologies work together, and facilitate coordination across dispersed engineering teams to expedite delivery of large digital projects. For more information on our clients and experience, see our case studies, read our blog on The Digital Frontlines, ask for references and  a consultation.