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App Development Cost: Top 4 Reasons Why Your Project Will Go Over Budget

Projects running over budget can be the demise of a business. The reasons are obvious, going over budget results in a decreased return of investment even in the best scenarios. At their worst, they can result in a complete loss and given the uncertain economic times any negative impact on capital could signal a company’s death knell. This situation is equally true for app development projects. While mobile apps help keep companies competitive it could even generate profit, a bad one which runs over budget can not only generate public relations nightmare but can cost people their jobs. Here are four reasons your app development project will run over budget if the app development cost is not handled correctly.

App Development Cost: ApInitial Proposal

cross-industry study conducted by McKinsey and the Centre for Major Programme Management at the University of Oxford found that the average overspend on IT projects clocked in at 45% of the starting budget. For each, the exact reasons why this occurs varies from company to company. A common reason that sets the ball rolling down the overspend hill is in the initial discovery. Even though this phase of the project is dedicated to research and determining what function an app will fulfill, if not done properly or poorly an overspend is likely to occur.

Typically this is where the needs of the app are addressed and a plan emerges on how best to achieve this. This phase is crucial when a company is looking to outsource app development, as the developers will need a clear frame of reference to work with. If the discovery and subsequent research do not take into account accurate app development and feature set costing the project may be doomed from the start. An app that serves one purpose can be drastically changed by the inclusion of added features or another target market. Such considerations need to be set in stone as early as possible. These costs are in constant flux and those changes need to be accounted for in order to keep the budget on track.

Faulty User Stories

A user story can be summed up as what the user would expect to get out of a particular app. This implies that the company should have extensive knowledge of the target market it is looking to provide the app for. User stories, in turn, create an expectation of the company for the developer to fulfill. If these parameters are well defined the developer can accurately quote how much it would cost to meet the expectation.

Problems occur when the user stories are vaguely defined and subsequent to change may make some paid for work redundant and increase the overall cost of the project. This is due to developers struggling to meet the needs of the app as they are prone to change.

Dreaded Scope Creep

App features and needs are prone to change, this is a reality. Often outsourced developers will include changes and revisions within a quote that occur once development has begun. However, it is often the case that companies want new features added that will often exceed the developer’s scope creep threshold. This extra cost will be passed on to the commissioning company. Companies need to be mindful of this even before development occurs. This will help keep the project focussed on the needs rather than the wants which start becoming exceedingly expensive.

For the above points, many of these pitfalls can be avoided by remaining focused on the actual needs of the app. The more features that need to be added to the app the more expensive the project is likely to become. From this standpoint, the list of features should be reduced to meet the exact needs of the user. Much of this should be clearly defined before a developer even thinks about coding a module. For companies outsourcing the app design and implementation, these early stages are completely under their control and during this period it must be a point of order to make sure budget overspends are avoided as much as possible and the app development cost is optimized.

The Multi-platform Development Conundrum

When faced with a decision between iOS or Android companies will want both. They need their app to hit the widest possible market. This in itself is the right approach unless the target market is specifically the users of one platform over the other. Where companies make the mistake is they want multiple platforms developed simultaneously.

In theory, this should reduce development time but in reality, quite the opposite is true. When developing simultaneously the developer road map needs to alter when problems in one platform occur. This is likely to occur multiple times per platform, running the risk of significant delays in bringing the app to the market. Rather, it is advised to have a completed app for one platform first then move onto another development cycle. By doing this the developers have a successful road map to work from that will require less time to modify. By having a successful road map problems encountered in the first development cycle can be avoided as well as providing potential solutions encountered while developing the app for a different platform. Often business leaders will see the increased cost this may entail and be hesitant to take this approach, however, in the long term this method has been proven to save money rather than waste it.


Company CFOs will know that even if they had the funds dedicating billions of dollars to R&D projects is not feasible due to the risks involved. Budgets are typically well-considered things, however, particularly within the IT industry costs can balloon due to preventable circumstances. Life will always through unpredictable events that result in projects going over budget when this is combined with preventable overspending the doors to the company may not be open for long.  The above list is by far not a complete list on how to avoid going over budget but may help in creating realistic expectations for mobile app development cost that help prevent the budget from being taken out back and shot.