On average, 60% of IT projects fall out of their pre-defined framework, for reasons of time or cost. Realistic planning is essential from the outset. Although this makes sense, many companies are still too naive in planning and implementing their apps and wonder why they’re not successful.
The decisive reason for or against a business app is in most cases the price or, in the best case, the relationship between price and performance. In this article we will show you what you need to take into consideration when pricing a new business app.
The hard facts
On the one hand, there is the cost of developing your app. Of course, it depends on the complexity of the application. If only one interface to a system is required, e. g. for mobile administration of customer data, the costs are significantly lower than if you want to connect different systems with each other via an app. If you communicate your ideas in as much detail as possible, you can create a very realistic cost estimate. Then it depends on the provider’s daily rate. There are big differences depending on where you’re developing, whether a team or a single freelancer is creating your application, and how much time pressure exists.
App costs =
development time in days x daily rate for provider
However, these are only one-time costs and even then this formula falls far too short. To run an application, you will purchase licenses from your provider. These are usually billed per year. Now the question is, how long can you run your app? In spite of all the adjustments, you will eventually have to create a new application.
license costs per year x runtime in years
Although cloud-based models are also gaining popularity in Germany, there are still companies that prefer to take care of the infrastructure themselves. In this case the license costs are usually lower, but additional positions are added.
costs for providing and operating the infrastructure x runtime
Modern devices have become popular these days and there is no question that tablets and data glasses can make every day work much easier. However, your employees must first be equipped with the necessary devices.
number of employees x costs per device
Despite all the discussions about intuitive operation, your users will still need training to use the new app efficiently. Especially when new ways of working are very different from traditional methods, it can take a while for everyone to familiarize themselves with the new app.
(training time in days x daily rate for lecturers) + (off-time employees in days x (number of employees x daily earnings per employee))
In addition, there are the annual maintenance fees from the provider and the internal support costs for the duration.
(runtime x service costs provider per year) + (runtime x cost of internal support per year)
If providers make significant changes in the basic system, this can lead to a costly upgrade. As a rule, such decisive changes are made every 2-3 years.
Number of upgrades in runtime x cost per upgrade
During operation, smaller and larger optimizations will be necessary. The costs for this can be kept clear if the changes are made internally or by a long-term partner. If it is such a specialized application that only the provider is able to make changes for you, it can be expensive.
average number of days for adjustments x daily rate x number of adaptations
Total app costs = (development time in days) x (daily rate for provider) + (license costs per year x runtime in years) + (costs for providing and operating the infrastructure x runtime) + (number of employees x costs per device) + (runtime x service costs provider per year)+ (runtime x cost of internal support per year) + (training time in days x daily rate for lecturers)+ (off-time employees in days x (number of employees x daily earnings per employee)) + (Number of upgrades in runtime x cost per upgrade) + ((average number of days for adjustments x daily rate) x number of adaptations)
What are the benefits of an app?
These factors are usually far more difficult to quantify. As a rule, a (mobile) application should increase productivity. So your department’s making more money. Some of our customers were able to increase the productivity of their service staff by more than 35% with a simple remote service application. In addition, such applications can significantly improve communication and cooperation between different departments. This means that decisions are made faster, fewer misunderstandings and therefore fewer mistakes.
In future, work steps no longer have to be documented manually, as the app automatically records all work steps in the database. Through detailed documentation, processes can be simplified and redundant or ineffective work steps can be quickly identified. All this affects the productivity, flexibility and efficiency of your company.
productivity increases x runtime
All data can now be evaluated in a way that is relevant to management, which increases transparency and minimizes the time and effort involved in preparing analyses. And best of all, everything happens in real time. New information or changes are transmitted from the database without delay. During this time, your employees can take care of their core tasks.
Of course, an app is never like another and depending on the digitization level of your company, you will achieve more or less powerful results. However, it is important that you always look at an application over its entire lifecycle and not just at the hard financial facts of the initial costs. Depending on the requirements and purpose, additional costs will be added. On the other hand, you can also expect massive optimization of your working methods, which will have a monetary impact.
Do you already have an idea for an application? We would be pleased to develop a cost-benefit analysis together with you.