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How Much Does It Cost To Build An App?

Jeff Francis, Co-Founder & COO

mobile app development testingOne of (if not) the most prohibitive hurdle to developing your own app is cost. First off, you have to make a concrete calculation weighing anticipated business gains against the cost outlay for development and support. According to many market research studies, including leading firms like Forrester, development costs are can represent only the tip of the iceberg. Once you take the time to spec out and build your dream app, you’ll find little things that you could have done better; or U/I updates that would make it more intuitive; or Google released a new update to Android; or Apple changed the resolution on the newest generation of iPads. Whatever the case may be, more than 80% of IT personnel polled in 2012 by AnyPresence found that their firms were updating their apps at least twice per year. A third of the respondents were pushing new updates every month. Forrester estimates that only 35% of any app’s lifetime cost is covered in initial development. This is a major stumbling block for many companies, and rightly so.

Apps are not an experiment that you can play around with and just see how the market responds. The future of enterprises is mobility and only companies that fully embrace and integrate mobile strategies effectively will thrive in this landscape in the months and years to come. So, swinging and missing on app development is unacceptable in the modern business atmosphere.

In addition to development representing but a portion of an app’s full cost, most companies looking to work with a mobile solutions partner (or even app developer if you want more of a vendor/client relationship) don’t know what type of cost ranges within which any given app could fall. There are a huge number of factors to consider, and every app is different in some way or another. As such, there are no perfect predictions to be had. However, we can provide you with some general cost brackets broken down by complexity and, therefore, required development effort.

At their most basic levels, apps come down to hours. Whatever feature you want, whatever U/I style you desire, whatever working relationship you want with your developer or parter will all affect the number of hours that a firm needs to complete the project. Some companies might quote their rates based on features you request, others might take your specifications and simply give you a flat cost amount, while others will just estimate the total number of hours required to complete the project, break that down by employee type, and give you a granular estimate that way. Regardless of the method employed, each company is making an internal calculation about how many hours they anticipate the project will require (based mostly on the feature requests and the complexity of any external hardware/software/API integration) and which resources that company will have to utilize to accomplish you goals. So, we can break down the cost buckets similarly.

Every feature your app incorporates equals a certain number of design, programming, project management, QA, and revision hours. The more features you request, the more hours required to deliver all of them, and the more the app will cost. The more complex the feature, the more hours required, and the more the app will cost. As such, the ideal working relationship with any vendor or partner is with someone willing and able to itemize each feature by the hours required to develop those features, cross referenced with the respective cost per resource hour. That way, you can obtain a granular overview of where the largest cost factors are. If your partner can do this for you, you can make informed decisions about which features are the most important or which features you might think about scrapping to save costs.

Most market research I’ve seen categorizes mobile app costs into three buckets:

  • Lower-level complexity, smaller feature list, generally one mobility platform: <$50,000
  • Medium-level complexity, medium-sized feature list, 1-2 mobility platform(s): $50,000 – $150,000
  • High-level complexity, large feature list, 3+ mobility platforms: $150,000+

The cutoff between the medium and high complexity buckets can vary some depending on the study at which you look, but it’s generally $100K+ or $150K+. Being more realistic for an enterprise context, high-complexity mobile solutions will generally run $150,000+. But, this categorization might not clear much up if you don’t know where your app falls in the spectrum to begin with.

For example, if you want to build an app that simply interfaces with your backend database, parses and analyzes that data, and then displays the information you want via a native tablet app on only one platform, that’s a relatively simple app (assuming your back end is well designed and any legacy hardware or software isn’t too hard to integrate into).

If you want to build a field sales application that supports offline data collection and caching, third-party hardware integration for a credit card reader, API support for payment and credit card security protocols, backend database integration, and social sharing? That’s going to fall into the second bucket and run you anywhere from $50,001 to $149,999 based on how many total features you deem necessary.

If you decide to completely overhaul your CRM and you want to build a new solution from the ground up, including microphone and camera integration into the application, learning algorithms, backend integration, custom performance metric reporting, shareable and group editable files, individual device management, individual app management, individual logins, varying security protocol levels based on employee department, division, title and seniority, custom VPN requirements by device or by app, you’re looking at a very complex application. Many of these things are absolutely necessary for your ultimate app, but you have to know that every feature you add, and as each of those features requires more and more expertise to deliver on, the higher into zone three you’ll climb. That’s not a bad thing by any stretch, because you’re building a more comprehensive, safer and more useful solution. But as your solutions become better, it simply requires more to build them.

So long as you can find a mobile solutions partner with the discipline and forethought to forecast each feature by hour and resource on the front end, you’ll be able to choose the features you can’t live without and which features can wait for v2.

A word to the wise, though — even if you find such a firm and make the best choices for your business, always beware that support, updates and continual improvements often require far more capital than building the v1 of the app in the first place. Know that choosing to build a mobile app is a long-term investment to solidify your place within your target consumers’ digital lives and stick to that mindset. It’s not about the extra few dollars you spend now, but rather how can you build an integrated solution that will stand the test of time and generate business returns for years and years to come.

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Why New Technology Has An Adoption Problem

Danielle Beurteaux

When 3D printing became a practical reality, in the sense that the actual printers became more efficient, less expensive, and more accessible to the average consumer, there was an assumption that the consumer 3D printing market was going to take off. We’d all have printers at home printing…. what? Our clothes? Toys? Spare organs?

That has yet to happen. 3D printing company MakerBot just went through its second employee layoff this year, driven by a market that’s developing much slower than predicted.

That same thinking is in play with a somewhat more prosaic technology – digital wallets. Apple Pay was released this year, as was Samsung Pay. There’s also Google’s Android Pay. During an earnings call, Apple CEO Tim Cook said: “We are more confident than ever that 2015 will be the year of Apple Pay.” But that expectation has yet to be realized, at least vis-à-vis consumers.

Consumers aren’t using any of the digital wallets en masse. According to Bloomberg, payments made via mobile wallets – all of them – make up a mere 1% of retail purchases in the U.S. The reason is that consumers just don’t see a compelling reason to use them. There’s no real reward for them to change from SOP.

Both these instances highlight a problem with assumptions about mass adoption for new technology – just because it’s cool, interesting, and accessible doesn’t mean a market-worthy mass of people will use it.

Who is more likely to use mobile wallets? Emerging economies without a stable financial and banking systems. In those environments, digital payments present a more secure and quicker method for purchasing. These are the same areas where mobile adoption leapfrogged older technologies because there was a lack of telecommunications infrastructure, i.e. many never had a landline phone to begin with, and they went directly to mobile. The value-add already exists. (But there are also security issues, to which consumers are becoming more sensitive. A hack of Samsung’s U.S. subsidiary LoopPay network was uncovered five months post-hack. Although one was expert quoted as saying the hackers may not have been interested in selling consumer financial info but instead in tracking individuals.)

Here’s some interesting data and a good point made: mobile payments are most popular in situations where the buyer already has his or her phone in hand and the transaction is made even quicker than swiping plastic. For example, purchases made for London Transit rides are responsible for a good portion of the U.K.’s mobile payments.

Mass technology adoption is no longer driven simply by the release of a new product. There are too many products released constantly now, the market is too diverse, and the products often lack a true raison d’être.

Learn more about how creative and innovative companies are finding their customers. Read Compelling Shopping Moments: 4 Creative Ways Stores Connect With Their Customers.

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Mobile Marketing Continues To Explode

Daniel Newman

If your brand isn’t among those planning a significant spend on mobile marketing in 2016, you need to stop treating it like a fad and step up to meet your competition. Usage statistics show that today people live and work while on the move, and the astronomical rise of mobile ad spending proves it.

According to eMarketer, ad spending experienced triple-digit growth in 2013 and 2014. While it’s slowed in 2015, don’t let that fool you: Mobile ad spending was $19.2 billion in 2013, and eMarketer’s forecast for next year is $101.37 billion—51 percent of the digital market.

  1. Marketers follow consumer behavior, and consumers rely on their mobile devices. The latest findings from show that two-third of Americans are now smartphone owners. Around the world, there are two billion smartphone users and, particularly in developing regions, eMarketer notes “many consumers are accessing the internet mobile-first and mobile-only.”
  2. The number of mobile users has already surpassed the number of desktop users, as has the number of hours people spend on mobile Internet use, and business practices are changing as a result. Even Google has taken notice; earlier this year the search giant rolled out what many referred to as “Mobilegeddon”—an algorithm update that prioritizes mobile-optimized sites.

The implications are crystal clear: To ignore mobile is to ignore your customers. If your customers can’t connect with you via mobile—whether through an ad, social, or an optimized web experience—they’ll move to a competitor they can connect with.

Consumers prefer mobile — and so should you

Some people think mobile marketing has made things harder for marketers. In some ways, it has: It’s easy to make missteps in a constantly changing landscape.

At the same time, however, modern brands can now reach customers at any time of the day, wherever they are, as more than 90 percent of users now have a mobile device within arm’s reach 24/7. This has changed marketing, allowing brands to build better and more personalized connections with their fans.

  • With that extra nudge from Google, beating your competition and showing up in search by having a website optimized for devices of any size is essential.
  • Search engine optimization (SEO) helps people find you online; SEO integration for mobile is even more personalized, hyper local, and targeted to an individual searcher.
  • In-app advertisements put your brand in front of an engaged audience.
  • Push messages keep customers “in the know” about offers, discounts, opportunities for loyalty points, and so much more.

And don’t forget about the power of apps, whose usage takes up 85 percent of the total time consumers spend on their smartphones. Brands like Nike and Starbucks are excellent examples of how to leverage the power of being carried around in someone’s pocket.

Personal computers have never been able to offer such a targeted level of reach. We’ve come to a point where marketing without mobile isn’t really marketing at all.

Mobile marketing tools are on the upswing too

As more mobile-empowered consumers themselves from their desks to the street, the rapid rise of mobile shows no signs of slowing down. This is driving more investment into mobile marketing solutions and programs.

According to VentureBeat’s Mobile Success Landscape, mobile engagement—which includes mobile marketing automation—is second only to app analytics in terms of investment. Mobile marketing has become a universe unto itself, one that businesses are eager to measure more effectively.

Every day, mobile marketing is becoming ever more critical for businesses. Brands that fail to incorporate mobile into their ad, content, and social campaigns will be left wondering where their customers have gone.

 

For more content like this, follow Samsung Business on InsightsTwitterLinkedIn , YouTube and SlideShare

The post Mobile Marketing Continues to Explode appeared first on Millennial CEO.

photo credit: Samsung Galaxy S3 via photopin (license)

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About Daniel Newman

Daniel Newman serves as the Co-Founder and CEO of EC3, a quickly growing hosted IT and Communication service provider. Prior to this role Daniel has held several prominent leadership roles including serving as CEO of United Visual. Parent company to United Visual Systems, United Visual Productions, and United GlobalComm; a family of companies focused on Visual Communications and Audio Visual Technologies. Daniel is also widely published and active in the Social Media Community. He is the Author of Amazon Best Selling Business Book "The Millennial CEO." Daniel also Co-Founded the Global online Community 12 Most and was recognized by the Huffington Post as one of the 100 Business and Leadership Accounts to Follow on Twitter. Newman is an Adjunct Professor of Management at North Central College. He attained his undergraduate degree in Marketing at Northern Illinois University and an Executive MBA from North Central College in Naperville, IL. Newman currently resides in Aurora, Illinois with his wife (Lisa) and his two daughters (Hailey 9, Avery 5). A Chicago native all of his life, Newman is an avid golfer, a fitness fan, and a classically trained pianist

How Emotionally Aware Computing Can Bring Happiness to Your Organization

Christopher Koch


Do you feel me?

Just as once-novel voice recognition technology is now a ubiquitous part of human–machine relationships, so too could mood recognition technology (aka “affective computing”) soon pervade digital interactions.

Through the application of machine learning, Big Data inputs, image recognition, sensors, and in some cases robotics, artificially intelligent systems hunt for affective clues: widened eyes, quickened speech, and crossed arms, as well as heart rate or skin changes.




Emotions are big business

The global affective computing market is estimated to grow from just over US$9.3 billion a year in 2015 to more than $42.5 billion by 2020.

Source: “Affective Computing Market 2015 – Technology, Software, Hardware, Vertical, & Regional Forecasts to 2020 for the $42 Billion Industry” (Research and Markets, 2015)

Customer experience is the sweet spot

Forrester found that emotion was the number-one factor in determining customer loyalty in 17 out of the 18 industries it surveyed – far more important than the ease or effectiveness of customers’ interactions with a company.


Source: “You Can’t Afford to Overlook Your Customers’ Emotional Experience” (Forrester, 2015)


Humana gets an emotional clue

Source: “Artificial Intelligence Helps Humana Avoid Call Center Meltdowns” (The Wall Street Journal, October 27, 2016)

Insurer Humana uses artificial intelligence software that can detect conversational cues to guide call-center workers through difficult customer calls. The system recognizes that a steady rise in the pitch of a customer’s voice or instances of agent and customer talking over one another are causes for concern.

The system has led to hard results: Humana says it has seen an 28% improvement in customer satisfaction, a 63% improvement in agent engagement, and a 6% improvement in first-contact resolution.


Spread happiness across the organization

Source: “Happiness and Productivity” (University of Warwick, February 10, 2014)

Employers could monitor employee moods to make organizational adjustments that increase productivity, effectiveness, and satisfaction. Happy employees are around 12% more productive.




Walking on emotional eggshells

Whether customers and employees will be comfortable having their emotions logged and broadcast by companies is an open question. Customers may find some uses of affective computing creepy or, worse, predatory. Be sure to get their permission.


Other limiting factors

The availability of the data required to infer a person’s emotional state is still limited. Further, it can be difficult to capture all the physical cues that may be relevant to an interaction, such as facial expression, tone of voice, or posture.



Get a head start


Discover the data

Companies should determine what inferences about mental states they want the system to make and how accurately those inferences can be made using the inputs available.


Work with IT

Involve IT and engineering groups to figure out the challenges of integrating with existing systems for collecting, assimilating, and analyzing large volumes of emotional data.


Consider the complexity

Some emotions may be more difficult to discern or respond to. Context is also key. An emotionally aware machine would need to respond differently to frustration in a user in an educational setting than to frustration in a user in a vehicle.

 


 

download arrowTo learn more about how affective computing can help your organization, read the feature story Empathy: The Killer App for Artificial Intelligence.


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About Christopher Koch

Christopher Koch is the Editorial Director of the SAP Center for Business Insight. He is an experienced publishing professional, researcher, editor, and writer in business, technology, and B2B marketing. Share your thoughts with Chris on Twitter @Ckochster.

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In An Agile Environment, Revenue Models Are Flexible Too

Todd Wasserman

In 2012, Dollar Shave Club burst on the scene with a cheeky viral video that won praise for its creativity and marketing acumen. Less heralded at the time was the startup’s pricing model, which swapped traditional retail for subscriptions.

For as low as $1 a month (for five two-bladed cartridges), consumers got a package in the mail that saved them a trip to the pharmacy or grocery store. Dollar Shave Club received the ultimate vindication for the idea in 2016 when Unilever purchased the company for $1 billion.

As that example shows, new technology creates the possibility for new pricing models that can disrupt existing industries. The same phenomenon has occurred in software, in which the cloud and Web-based interfaces have ushered in Software as a Service (SaaS), which charges users on a monthly basis, like a utility, instead of the typical purchase-and-later-upgrade model.

Pricing, in other words, is a variable that can be used to disrupt industries. Other options include usage-based pricing and freemium.

Products as services, services as products

There are basically two ways that businesses can use pricing to disrupt the status quo: Turn products into services and turn services into products. Dollar Shave Club and SaaS are two examples of turning products into services.

Others include Amazon’s Dash, a bare-bones Internet of Things device that lets consumers reorder items ranging from Campbell’s Soup to Play-Doh. Another example is Rent the Runway, which rents high-end fashion items for a weekend rather than selling the items. Trunk Club offers a twist on this by sending items picked out by a stylist to users every month. Users pay for what they want and send back the rest.

The other option is productizing a service. Restaurant franchising is based on this model. While the restaurant offers food service to consumers, for entrepreneurs the franchise offers guidance and brand equity that can be condensed into a product format. For instance, a global HR firm called Littler has productized its offerings with Littler CaseSmart-Charges, which is designed for in-house attorneys and features software, project management tools, and access to flextime attorneys.

As that example shows, technology offers opportunities to try new revenue models. Another example is APIs, which have become a large source of revenue for companies. The monetization of APIs is often viewed as a side business that encompasses a wholly different pricing model that’s often engineered to create huge user bases with volume discounts.

Not a new idea

Though technology has opened up new vistas for businesses seeking alternate pricing models, Rajkumar Venkatesan, a marketing professor at University of Virginia’s Darden School of Business, points out that this isn’t necessarily a new idea. For instance, King Gillette made his fortune in the early part of the 20th Century by realizing that a cheap shaving device would pave the way for a recurring revenue stream via replacement razor blades.

“The new variation was the Keurig,” said Venkatesan, referring to the coffee machine that relies on replaceable cartridges. “It has started becoming more prevalent in the last 10 years, but the fundamental model has been there.” For businesses, this can be an attractive model not only for the recurring revenue but also for the ability to cross-sell new goods to existing customers, Venkatesan said.

Another benefit to a subscription model is that it can also supply first-party data that companies can use to better understand and market to their customers. Some believe that Dollar Shave Club’s close relationship with its young male user base was one reason for Unilever’s purchase, for instance. In such a cut-throat market, such relationships can fetch a high price.

To learn more about how you can monetize disruption, watch this video overview of the new SAP Hybris Revenue Cloud.

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