What Are the Ongoing Costs of Owning a Custom App?
If your company is planning to invest in a custom mobile app, it’s important to have a big picture view of your ongoing expenses…beyond the initial capital expenditure.
We want to help you with that.
Your ongoing cost of ownership includes several categories of service. Some, or all, will apply to your organization: routine maintenance, new features, help desk support, hosting and training.
Let’s look at each of these in more depth.
It’s common knowledge that cars need maintenance (oil changes, tire rotations), and homes need maintenance (a new roof, HVAC cleaning), software is no different.
You should plan to have your developer on retainer for a certain number of hours each month (or quarter) to handle the typical maintenance items I’ll cover below. The cost of the maintenance retainer will vary depending on the complexity of your app, so this is something to discuss with your developer.
In the world of mobile apps, maintenance includes:
You may not notice any post-release bugs if your app was well-tested before it was released. Or at least not any that are easy to find or part of the core functionality. But, the more complex the software, the more likely it is bugs will crop up, even if infrequently.
Your team will keep track of these and decide which need to be fixed right away, which can wait, and which might wait forever.
Platform Compatibility Updates
Approximately once a year both Google and Apple release a major update of their operating system (OS). Your mobile app will be installed on top of those operating systems, and when your users update their device to the latest version of iOS or Android, you’ll want to know in advance that your app is compatible.
It is not uncommon for certain features of an app to stop working when the underlying OS on the phone is updated. Ensuring your apps are compatible is a bare minimum maintenance requirement.
Fortunately, Google and Apple release beta versions to developers, in advance. This gives us time to test all our apps against the new OS, and fix any issues so that your users are not impacted when the OS update hits their phone.
This is extremely important maintenance and must be done proactively.
Ensure that the maintenance plans your developer offers includes this.
Device Compatibility Updates
If you’re an Apple user you’ll remember when the company released their iPhone 6. The iPhone 6, and iPhones since then, are noticeably larger than previous generations.
If you had owned an iOS app at that time, you would have needed to have your maintenance team test the app against the larger screen size to be sure the design scaled up. They would also need to submit an update to the app store listing with screenshots of your app at that larger size.
This type of maintenance is unpredictable (i.e. we don’t know what new devices will be invented in the coming years) so it’s best to consider it an “as-needed” service that can be addressed with your maintenance retainer.
This can include security updates, taking care of technical debt and minor platform compatibility updates. These services can be wrapped into a planned batch of app updates as part of your maintenance retainer.
2. New Features
Sometimes companies make the mistake of thinking version one of their app will include every feature they’ll ever want or need. That is not the case. Inevitably, users will make requests you did not anticipate and even your own team will have new ideas.
This is the nature of technology, it’s always changing. Imagine if Apple considered the first iPhone a final product, or Microsoft considered the original version of Windows as good enough. It’s just unrealistic. Your company absolutely needs a yearly or quarterly budget for new features.
This budget should be separate from your standard maintenance retainer. Please discuss this with your developer. Once the initial development is over you’ll all have a better idea of what the next year of updates may look like and your developer can make suggestions based on their very thorough familiarity of your code base, your approximate yearly budget and what is most important to your team, and users.
Or, if you need to set the new feature budget upfront in order to get approval on the initial development that is possible as well.
3. Help Desk Support for Users
Depending on the size of your support department, and the number of users who will have your app, you may be able to piggy back on the support team you already have.
In any case, you’ll want to be sure you have resources on hand for when the inevitable happens…a user can’t figure out how to use your app or has a problem (either real or perceived) with it.
If your user-base is your internal team of employees and/or contractors they’ll need someone to call when they have questions or need support. If you’re a SAAS company selling this app as part of a bundle to your customers they’ll definitely need someone to call for support.
If you don’t already have an internal support department you can choose to: hire someone, reallocate existing resources or outsource your help desk needs to a third party provider.
4. Managed Hosting
Your company may already have access to hosting services or servers that your application can piggy back on. If not, it will be necessary to purchase managed hosting.
Your developer can explain what you’ll need once they finish the system design stage of your project (this happens as part of our initial Strategic Planning at Big Fish).
If your developer does not provide managed hosting as a service, and you don’t have an internal IT department or person, you’ll need to find a company to provide hosting services.
The costs will vary, from about $500 per month to $1000 per month or more. This will depend on factors like the size of your user base, amount of data that needs to be stored and how much traffic your apps will receive.
For example…on the high end you may have thousands of employees and contractors across the country all simultaneously using your app and saving and downloading information from your servers. On the low end you may have 75 to 100 field service techs using the app throughout the day to view, fill out and get signatures on work orders.
CIO Tech in Tampa Florida is a US-based company that provides 24/7 managed hosting services.
5. User Training
Depending on the complexity of your software, this could be a minor consideration, or it could be more substantial. As with any applications your team will need to use as part of their job, a time allocation should be made to getting new users up to speed with your app.
What Overall Cost Ranges Can I Expect?
To recap, we’ve talked about a few different categories of ongoing expenses: maintenance, new features, hosting, help desk and training.
The frequently cited rule on maintenance is that you can expect to spend 16-20% of the initial development costs on maintenance each year. This means a $100,000 software suite would run $16,000-$20,000 per year to maintain.
For new features you can almost pick your own yearly budget to set aside.
Help Desk and hosting will vary depending on whether you manage this in-house with existing resources, or outsource to a third party vendor.
I hope you’ve found this information helpful. The investment in custom software is an important one, and getting CFO approval will be easier when you have a clear picture of the ongoing operating expenses related to this investment.
If your team has already decided to move forward with a custom application build please reach out, we’d love to discuss the possibility of helping you bring it to life, and answer your initial questions.
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