As Technology Consultants, we get this question a lot. Not only with potential clients, but also during casual conversations with friends, family, on planes, and at dinner parties. Websites, portals, mobile applications, web applications, APIs…these are all different kinds of online products that businesses develop.
So I’ll tell you exactly what an online product costs to develop in today’s multi-device world: it depends.
It’s a lot like asking, “How much does a car cost”? Well, you could scoop up a used 2003 econobox rebuilt by your cousin’s neighbor for $250. Or, you could splurge for a brand new Rolls Royce Wraith with a standard 6.6L, 12-cylinder, engine for $285,000.
A simple, responsive brochure website, built on a consumer-class platform like WordPress can range between several hundred or a few thousand dollars. A complex web application or portal, on an enterprise-class platform like Sitecore or DNN Evoq, containing custom, complex functionality and high performance standards, may cost millions or even tens of millions of dollars to strategize, design, architect, build, deploy, and support.
Think Amazon was cheap?
There’s also a perception that mobile applications are “smaller” and therefore somehow cheaper to build. The fact is, the only thing inherently smaller about a mobile app is the device on which it’s viewed.
For the purposes of this discussion, the assumption is that you’re inquiring about a business-class online product, working with a professional development partner, and building the site on a business-class platform.
Factors that drive UP the cost of online product development:
Complexity – How complex is the functionality of the product? Complex functionality like integrations with 3rd party sites, applications, or databases, calculators, complex eCommerce models, and process-driven products take more time and effort on the part of the developer to build than products with simpler functionality, like a general marketing website.
Custom Design – A product built from scratch with a custom design will cost more than one built from a design template. That said, a good templated product should look custom to the end user, and not have a “your logo here” look. Enterprises that have well developed brand guidelines generally require custom designs to advance their branding. A medium sized business with basic branding and standard functionality may be wise to drop a logo, fonts and colors into a pre-designed template.
3rd Party Design – Often companies like to work with their branding agency to design an online product. This often makes perfect sense from a relationship and collaborative standpoint – you’ve been working with a branding or traditional agency for years. They “get” you. They do great print and collateral work with fantastic designs. Why not use them.
There is a huge difference between designing for print or collateral, and designing an interactive system for the web. A User Interaction (UI) designer understands the art and science behind how people use an interactive system and designs accordingly. With a designer who is not trained in UI, what you often get is a beautiful product that is a challenge to use, makes it difficult to find the information the user seeks, and is problematic when it comes to taking the action(s) you most want the user to take. A beautiful site with poor usability costs the client every single day that site is live in lost engagement, site use, repeat visitors, and conversions. In short, make sure a trained User Interaction designer is designing your site.
Developer Location – Generally, on-shore developers have more experience, recruit and train better talent, and have higher overhead (offices, benefits, payroll) than off-shore developers. That’s just a fact. Some, repeat some, geographic locales are famous for rock-bottom pricing in order to attract business, and with that comes an added expense to the client. This includes having to manage often substandard and, quite frankly, shoddy development partners’ work across time zones and around language barriers. This expense is often a factor of 3 to 4x the price of the work itself. With that being said, some off-shore locales produce some of the best, most talented multilingual developers and coders in the world, and can provide real value. The point is, if the cost is rock-bottom, more often than not, so is the work.
Subcontracting – Some development firms will subcontract work out, sometimes to a cheap off-shore developer, and pocket the difference, without closely managing the subcontractors. Again, if the behind-the-scenes developer doing the actual work is sub-par, this will drive cost, both in money and time. Make sure you ask your development partner if they subcontract at all, if they would subcontract out any part of your project, who specifically will be doing the actual work, and how they will be managed. This includes freelancers. Freelancers can provide tremendous value to a project, but you need to understand up front who works for the company with whom you’re contracting, and who does not.
Content Creation or Migration – If you are relying on your development partner to create content, then this will drive up the cost of the site. If you are creating or have created the content, your cost to your developer is nil. Content migration, or moving content from you current site to your new site, can often be partially or completely automated by your development partner, so make sure you ask about it.
Factors that drive DOWN the cost of online product development:
Simplicity – Simple systems are easier to use, and easier to build. That doesn’t mean you can’t have complex functionality. It means that the best developers and designers in the world make it their job to make the complex simpler, and the difficult easy.
Templated Design – If your branding is basic and your functionality is standard, a templated design can help reign in cost. If you require custom functionality and your branding is somewhat mature, a custom design may be more appropriate.
One Stop Shop – Having a single firm handle your project from start to finish creates efficiency. Why? Because their delivery teams, hopefully made up of specialists like a Project Manager, Technical Lead, Business Analyst, User Interaction Designers, Developers, QA Testers, and so on work together as a unit all the time. They have synergy. It’s like bringing in a website pit crew to steward your time and resources in the best possible manner, and provide a smooth journey for you and your project.
In-House Resources – Generally, when your developer partner has available and assigned resources in-house, this is more efficient than using a lot of outsiders.
Creating Your Own Content – No one knows your business and your customers better than you. Creating your own content will not only serve to keep your build costs down, but will serve you over time as you create and market continuous content to educate your customers. The content has to be high quality, so hiring a writer experienced in your segment may be a wise investment.
Remember, the investment in your online product is not just time and money, but also the extent to which that product provides a smooth, easy, elegant experience that increases engagement and conversion, while eliminating barriers to use. In the end, your product, and the experience your users have with it, is crucial in shaping your customers’ perception of your brand.
