Depending on your organization’s requirements and specifications, deciding on whether or not to buy or build software may be a challenging task. There are several factors that need to be weighed before selecting a suitable approach. If you decide to settle for buying over building, in some cases you may miss out on the efficiency derived from having a tailor-made product. However, if you decide to build, you may cost your company time and resources. Such dilemmas arise but we will clear-up this as we analyze each path. Let us take an in-depth comparison on both approaches as we help determine the best direction for your business to take.
Factors to Consider Before Buying or Building a Business Application
1. Time: This is an important factor in business, for in many instances it may be the distinguishing factor between profit and loss, or success and failure. The time it takes to implement a business application should be put into consideration to mitigate any losses which may be as a result of delayed implementation of an application.
2. Cost: The cost of an application manifests in two dimensions. The first may be development cost, when considering a custom build application or purchasing cost, if you decide to buy an existing one. The second dimension is a maintenance cost, which may comprise monthly charges or subscription, or paying developers and IT specialists for maintenance. Both variables should be assessed for they may affect overall costs differently, depending on the approach you take towards implementing a business application.
3. Expertise: The skills required to train your employees on how to use a certain application, may vary depending on whether you decide to build one from scratch or use an existing one. Their proficiency with the application may have an impact on day to day running and therefore should be put into consideration before buying or building a business application.
4. Scalability: Another major factor to consider is the ability of the application to scale according to demand. Scaling can be done both vertically and horizontally, when considering servers, databases, and other components involved in the implementation of an application.
5. Specialization: The degree to which an application meets your company’s needs could go a long way in increasing productivity and therefore needs to be put into consideration. A tailored application boosts productivity, and facilitates efficient service delivery.
When to Buy a Business Application
It is best to purchase a business application if most of the factors, such as the ones mentioned above, are in favor of it for example:
1. When Time is of the Essence: If your company is in urgent need of an application, then it may be much easier to buy rather than to build. This is because the development of software solutions usually takes a long time, and is also prone to delays in some cases. The process involved in building an application include designing, prototyping, building, training and phased implementation. If you decide to buy this is reduced to just implementation and training, which goes a long way in speeding up the adaptation of a new system.
2. If it Scales Better: Many companies are doing away with the past trend of designing their own applications, and systems. Rather than purchasing their own servers to implement applications, most are opting for cloud services like Software as a Service (SaaS). This is due to the challenge of scaling brought about by an increased use of system resources due to high demand. Cloud services are designed to scale both vertically, or horizontally, depending on the demand. This makes it very efficient for businesses, as they don’t have to worry about making major changes to their existing infrastructure to upgrade their system and services.
3. Availability of Resources and Material for Training and Reference: Off-the-shelf applications are usually tried and tested solutions for they are used by a variety of businesses. Plenty of resources are made available in the form of video tutorials, community forums, documentation, and a more experienced customer service team. As a result of this it is much easier for solutions to common problems to be found when using a vendor application.
4. Costs Less: There are several overhead costs involved in building your own application. As a result, it may be cheaper to purchase one rather than build. However, it is good to note that many vendor applications are availed under subscription packages, and are therefore subject to recurring costs. It is good to determine whether recurrent expenditure may be necessary and cost-effective in the long-run rather than dwelling on the assumption that it is cheaper as long as it’s readily available.
5. You are Trying to Solve a General Problem: There is absolutely no need to build an application if you can find one in the market that can already solve the problem which you may be trying to address. As the saying goes, there is no need to reinvent the wheel, for in doing so, you will incur unnecessary costs and lose on time and resources.
6. Lack of Expertise to Implement the Solution: If your technical team can’t build a custom software solution for you then it may be better to use existing software. Some software available in the market like project management tools, usually come with room for integration with existing software services. They may also expose APIs, which provide room for customization and integration with other software.
When to Build Business Applications
In other situations, it may be better to develop your own custom software application. Below we highlight a few of such circumstances:
1. Optimize for Costs in the Long-Run: As highlighted on previously, off-the-shelf applications may have a cheaper cost initially. However, in the long-run it may be better to develop a custom application solution. Many organizations that use cloud-based services, attest to the fact that, as their user base grows, and they use more and more cloud resources, their costs tend to skyrocket. As a result many opt to implement their own custom solutions, which may involve purchasing their own servers to manage costs. If you want to see exponential growth it is better to implement a custom solution, as it will give you the flexibility of adopting your system to radical changes as a result of rapid growth.
2. Security Reasons: One major disadvantage of using vendor applications, is that they have well-known vulnerabilities, and hackers are constantly trying to discover new ones even after the old ones have been patched. This could put your business at risk, especially if your application’s solution manages sensitive data such as client information, and company info. For this reason, it may be better to implement a custom solution to reduce the risk of infiltration by hackers.
3. If you require a Specialized Application Solution: If your company needs to perform a highly specialized task it would be better to develop a custom application. The only alternative to this would be to chain together existing software using plugins but such a solution won’t be able to scale well.
4. Dedicated Support and Assistance: If you hire a software development company, or your internal technical team designs and builds an application for your business. You will have the advantage of getting detailed and specialized assistance in case issues arise. Even though there may not be as much information freely available as compared to vendor applications, the fact that the people who designed the software will be available to troubleshoot and solve problems, will guarantee smoother operation.
5. Integration with a Wide-Range of Tools: A huge advantage of custom software is that you can have it designed to your liking. When buying an application, you aren’t always guaranteed that it seamlessly merges with your existing ecosystem. But with a custom solution that can be easily achieved for it can be designed with your existing toolset in mind. The benefit of this is that it makes the transition to adopting the system much easier for your team and once the application is complete, it will be up and running with much less friction.
Advantages of Buying over Building
Easier to Scale: Vendors usually have mechanisms in place to scale the software according to demand, and usage therefore, there is much less need to worry about how the system will need to meet user demand.
Tried and Tested: Off-the-shelf software is usually implemented by several other businesses and has therefore withstood the test of time. There are plenty of workarounds available to common problems and this facilitates easier troubleshooting and problem solving.
Faster Implementation: Due to the software being readily available, it will take far less time to implement it as resources for training are also readily available. As a result it will facilitate faster adoption into your workflow, as compared to building an application from scratch.
Advantages of Building over Buying
Customizable: The ability to tailor the software according to your organization’s preference is definitely a huge plus for custom software. There won’t be any redundancy of features, and everything you need will be available, with plenty of room for improvement.
Employee Contribution: In the process of designing a custom application, your employees get a chance to contribute their ideas, as to how they would expect the system to assist them in their day to day operation. This will definitely facilitate a smoother transition in the adoption of a new application.
More Control: If we consider of-the-shelf software which is managed by a vendor, we notice that updates and patches are based on their timelines. On the other hand, owning rights to a software gives you the flexibility of control beyond a vendor’s timelines which you otherwise wouldn’t have had.
Case Studies on When to Buy or Build
Websites: There are several content management systems that facilitate the creation of websites for example: WordPress, Wix, SquareSpace, and Shopify among others. If you are in need of a standard website, it is much better to use such website building tools to get the job done. However, if you are designing a highly custom site for example an augmented reality-based e-commerce platform, then it would be better to build your own.
Mobile Applications: When it comes to mobile apps, the same case applies. If you say you want a mobile application to manage tours. It is much easier for you to purchase services rendered by a travel app company, for it will not only be cost-effective but will also save on time and resources.
Project Management Tools: There are several project management software available in the market and this makes it much easier to find a specialized tool for your given industry. As a result it is very unlikely that a company would need to implement its own custom project management application.
CRM Solutions: Similar to project management tools, there are plenty of CRMs available in the market and some of which are industry-specific, and therefore address the most common CRM needs pertinent to most businesses. With this in mind it is better to buy a CRM rather than build a custom one, for most of the offered plugin and integration options.
The golden rule when it comes to deciding on whether to buy or build software is to assess your requirements and consider the most logically viable option. Usually if the type of software you want to implement is common such as the ones mentioned above, then it would be more cost-effective and viable to buy rather than to build. On the other hand, if there is absolutely no software available in the market, or for one reason or another, you need fine-grained control on the implementation details, then it is better to build. In reality however, most organizations end-up buying, for software solutions have existed for some time now, and thus most of the common problems have already been solved. Taking into consideration what we have looked at the choice lies with you and your team. Sometimes it may also take a bit of market research to determine whether the software you need is available, but in many cases you are likely to find a perfect fit.