Product development can become fairly costly, especially when you want to make sure it is done right. In order to ensure the product is done right, it is important that you do your research. You need to find the cost-driving factor in product development. This would help you calculate your cost and even find out ways to cut down on it.
With the help of this blog, you will be able to figure out what the cost-driving factors in product development are, so you can make the most of your time and money when building your digital product.
Size Of The Product
One of the first things that impact the cost of product development is undoubtedly its size. The larger product you have in mind, the higher would be the costs. On the contrary, smaller projects do not cost a lot of money.
This is usually because of its direct influence on the time and team size required for building it.
A small software modification can be completed within a week or two whereas building new software for an enterprise could extend to 8+ months, sometimes even years.
Small to midsize projects requiring smaller modifications, integrations, or simple MVP development require comparatively less coding and hence, a lower cost. Large size to enterprise size product development projects like products with multiple pages, intuitive designs, large user-base, multi-platform apps, etc., may require even years of development with a large dedicated team, hence the costs increase.
Type of Product Development
The next important factor that determines the cost of product development is the type of development you require. Different businesses have different requirements when it comes to their product. Some want to build from scratch or ideation phase while others want to simply add new features to their project or modernize it using the latest stack. Whatever the requirements, prices vary accordingly.
New Product Development
This is when you need the entire team of developers, managers, business analysts, designers, and more to get started with the product ideation phase. They perform research around the idea, do a quick market analysis, and start with creating the wireframe. Once that is done, they get started with the MVP development and iterate it based on user feedback to build the perfect product. This costs extra as you just go to the team with the idea and they deliver a full-fledged product by the end of it.
Upgrading/Enhancing Existing Product
This is where you already have an existing product but want to upgrade/enhance it by adding new features to it. As this is a simple upgrade with building a feature or integration, you need not pay a larger cost.
Application Modernization
As companies aim to digitally transform, they are seeking to modernize their existing legacy applications. This means migrating the apps to new platforms to upgrade them to new versions of the same technology. Depending on the size of your legacy application, application modernization can vary in costs.
Custom Development
The next and one that requires the highest level of resource commitment, be it in terms of costs, human capital, or technology. Any custom requirement requires extra resources, and dedicated time, and could cost higher.
Complexity Of The Product
The next most important factor affecting your product development cost is the complexity of your product. The more features, new technologies, pages, screens, and other integrations you want to add to your product, the higher would be the cost of development. The complexity of a product increases its requirements in terms of time, design, coding, and team. Complex apps also have requirements like storing big blocks of data, integrating with third-party apps, having multiple forms, microsites of geolocations, running on various platforms, and even offering complete personalization. Simple products with limited features and screens are quicker to build and cost less. Complex products, on the other hand, require a lot of commitment, hence costing more to build.
Team Requirements
One of the largest chunks of any software development cost goes into the salary or fees paid to the team. The developers’ costs are pretty high in some countries and the larger the team or the seniority of developers your project requires, the higher would be the cost. A typical team for product development includes:
- Senior-Mid-level Developer
- Front-end Developer
- Backend Developer
- UI/UX Designers
- QA Engineer
- Project Manager
- Product Manager
Development Approach
There are different approaches to getting a product developed. Some build their in-house team for product development while others outsource it to an offshore agency. Many others hire remote developers and others that build dedicated teams for their products. The development approach determines how much your overall software development costs.
In-house software development can be costly as you need to add infrastructure costs, employee-paid benefits, hardware/software costs, and many more. Software development outsourcing helps save on these costs. If you choose to outsource your product development or build a dedicated team, you can save a lot in the development process.
Integrations
The next factor that can influence the cost of product development is the integrations it will require to communicate with other apps. Some products require higher system integration while others can work independently. However, in the majority of the cases, digital products require integrations with either third-party applications, APIs, or existing legacy applications. The more you want your product to integrate with other apps, the higher would be the cost of API management.
Innovation & Creativity
Another factor affecting the product development cost is the extent of innovation or creativity required in it. Many businesses want to offer something that has never been delivered before. This requires a lot of brainstorming and building a UI and UX that is new. Apart from UI/UX designers, graphic designers, and developers, you also need a team to brainstorm around the innovativeness of the product.
And not just that, many businesses want their product to be impressive in terms of new technology. IT should be IoT-enabled, collect & make predictions/decisions based on data, run AI/ML algorithms, and even be compatible with AR/VR devices. This requires AI/ML engineers, data scientists, IoT engineers, and more. This would add to the cost as these new-tech developers and engineers charge larger fees for their services.
On An Ending Note…
We hope that you enjoyed our article on the cost-driving factors in product development. Many factors go into developing a product, with the cost of development being one of them. In this blog, we share some of the top cost-driving factors that you should know as you develop a new product. Keep these in mind as you move forward with your product development!
And in case you are planning to save costs while developing your product, taking the MVP development approach or outsourcing to an experienced offshore company can be strategic moves. You can join hands with an offshore product development agency to build your product at a more affordable cost.
Author Bio:-
Tanya Kumari leads the Digital Marketing & Content for Classic Informatics, a global web development company. She is an avid reader, music lover and a technology enthusiast who likes to be up to date with all the latest advancements happening in the techno world. When she is not working on her latest article on tech dynamics, you can find her by the coffee machine, briefing co-workers on the perks of living a healthy lifestyle and how to achieve it.