Application development costs – Cost optimization method

"Application development costs in Vietnam" is a keyword that has been searched and catches a lot of attention from Japanese enterprises, especially during the age of booming digital transformation. So, what are the costs and benefits of application development in Vietnam? Let’s find out with us in the following article!

What are the application development costs?

Application development costs vary and largely depend on the quality of the human resources, the type of application and functions that are installed and integrated into the application under the client’s request. 

Application development costs are also calculated based on the manpower, including qualification, experience of the engineers who are involved in the project, and completion time. The more it takes to study, build and develop an application, the higher the costs will be.Application development costs are also calculated based on the manpower, including qualification, experience of the engineers who are involved in the project, and completion time. The more it takes to study, build and develop an application, the higher the costs will be. Because of this, it is difficult to come up with a specific and accurate application development cost.

Application development costs depend on the human resource, type of application and fixed costs.

Calculation of application development costs

Even though there is no specific number for the cost of application development, we can still use the below formula:

Application development cost = Job unit cost x Working time + Fixed costs

In which:

• The job unit cost is calculated based on the wages, bonuses for engineers and programmers for each working month.
• Working time is the actual time spent for the development of application system.
• Fixed costs usually include domain purchase cost, SSL certificate. Besides, there are costs for equipment, infrastructure, server maintenance etc. In addition, when the application development is completed, there is a registration fee for the distribution to users through App Store or Google Play.

Based on the above calculation, enterprises can calculate their own costs and make their own budget for the application development.

Factors affecting the costs of application development

Human resources

Key human resources that are directly involved in the development of application include programmers and system engineers. The cost for these positions is around 300,000 JPY to 800,000 JPY a month. Programmers and system engineers working for big companies will cost more.

Key human resources that are directly involved in the development of application are programmers and system engineers.

Fixed costs

Fixed costs include the budget for domain purchase, SSL certificate, server maintenance and registration at application stores such as App Store, Google Play.

Each of these costs usually vary from 10,000 to 20,000 JPY for one month (domain, server management), one year (SSL certificate), one time (registration at application stores).

Application operation and maintenance

After the successful development of an application, the company needs to pay attention to its operation, maintenance, bug fixing and timely updates of new functions. This will help enhance the application quality, bring more benefits to the clients and thus, more revenue for the company.

The costs of operation and maintenance post-development of an application include: server maintenance cost, operation system update for each version and bug fixing.

Server maintenance

Server maintenance is one of the important tasks after the development of an application. The provider of application development service will carry out periodic maintenance, cleaning of the server.

A team of highly skilled engineers, fully equipped with knowledge and expertise for this task, will carry out the overall inspection, data compilation and then provide consulting, evaluation of the application for the company. Afterwards, appropriate plans for bug fixing and upgrade will be provided.

Support for operating system updates

Periodic updates of the operating system will help enhance user experience by collecting data on behaviors, constructive comments and remarks.

A team of experienced programmers and engineers from the application development service provider, equipped with knowledge and high skills, will support the client for this task.

Periodic updates of the operating system will help enhance user experience by collecting data on behaviors, constructive comments and remarks.

Bug fixing

Application development costs also include debugging task in order to fix the bugs, improving user experience.

Application development costs vary depending on the type of application

Some common types of application on the current market are:

• Web App: Users can access this application through a web browser on the Internet. Web-apps do not have limit for the information and provide a large amount of data to users. However, web-based application development poses a risk regarding viruses and operation speed.
• Native App: These are the applications commonly seen and downloaded from CH Play, App Store, Google Play. The advantages include quick download speed, easy access to users and possible sale via the apps. However, the original applications may face the disadvantages of difficulty in attracting the users and high development costs.
• Hybrid App: This the combination of native app and web app. Advantages of hybrid apps include wide application on all operating systems such as iOS and Android. An enterprise may develop these on their own if their team has good knowledge of “HTML5”, “CSS3” or “JavaScript”. Also, functions can be improved, which is impossible on web apps. Despite this, hybrid apps do not have the operation speed like that of web apps. Native functions are also difficult to utilize.

Determining the right type of application will save the company a lot of time, money and effort.

Application development cost saving methods

The costs for application development are usually very high, accounting for a large part of the investment budget. Therefore, how to save these costs has always been a concern of many Japanese enterprises. Let’s check out the 6 methods below for cost saving.

Understanding users’ needs

The best way for a company to save its application development costs is to narrow down its target customers.

Survey to see which group of users is bigger, iOS or Android. Besides, the company should clearly determine its target customers when developing an application, individual or enterprise. Afterwards, there should be a design and clear description of functions before the development starts.

Survey to see which group of users is bigger, iOS or Android operating system to narrow down the target customers.

Checking the design and functions before development

Checking the design and functions to be integrated in the application before development is the first key to cost saving.

Because if the company has to respond to requests for changes, supplement after the application is completed, implementation will be lengthened or postponed. This will increase manpower cost by the day.

Instead, the company needs to be proactive in checking, reviewing all the design as well as specifications before starting the development of application. Preparing in advance certain forms, description of features, usage purpose and suitable functions for each device also help saving the development cost.

Profit and cost sharing with the development company

This is one of the development cost saving methods widely used by many Japanese enterprises. With this method, enterprises collaborate with the development vendor for development and operation cost sharing. Revenue from the application will be divided according to the contribution ratio by the parties.

Determine the internal process

Dividing the process for application development and handling internally in combination with external outsourcing will help the company save a lot of costs.

Dividing the process of development and handling internally in combination with external outsourcing will help the company save a lot of costs.

Save costs by minimizing the application functions

The more functions an application has, the more process is involved and the more expensive it is. Therefore, the company should clearly determine the most basic and useful functions that are required. At the same time, cut down on the unnecessary parts. More advanced and diversified functions, ideas and requests can be added in later updates.

Select an application development vendor on the market with reputation and low-cost

There are many service providers with different quality and development cost. It is advisable that the company search for and refer to information about the vendor’s track records, pricing as well as completed products. After that, comparison should be made to select the one with good reputation and reasonable pricing.

Each of the cost saving methods above has its own merits and demerits. Depending on the requirements, budget and the development partner’s reputation, enterprises can select one that is most suitable for their direction.

Notes when calculating development costs

As mentioned above, application development costs include such factors as fixed cost, human resources, operation and maintenance. However, some application development service providers do not mention these in the contract. This creates difficulties for the company during maintenance, operation and problem solving after the application is completed. Also, the fact that operation and maintenance costs are not included from the beginning will cost the company an additional budget for these items later.

Therefore, during the calculation of application development costs, enterprises need to carefully review the contract to see if these items are already taken into account. The costs for operation and maintenance on the market usually account for 10 to 20 percent of the application development cost.

Application development costs include such items as fixed costs, human resources, operation and maintenance.

The costs of application development in Vietnam, Japan in particular and in the world in general vary greatly. These costs depend on the scale, type of application, functions and quality of human resources. If an enterprise has no experience in application development, start with minimum specifications. If you are interested in the application development service in Vietnam, contact Luvina Software via our hotline or email today for consultation and quotation.