With the ever-changing digital era of today, companies are constantly faced with the challenge of keeping up. As new startup company or seasoned business player, the question never does fail to be asked: build or purchase software—is it the wise choice? With changing technologies, dwindling budgets, and company objectives to balance, the decision is far from a no-brainer.
This e-book breaks down the advantages and disadvantages of building custom software versus purchasing off-the-shelf, so you can make a well-informed decision that fits your business long-term strategy.
The Build vs Buy Problem
Build vs buy software decision typically stems from one root problem: control vs convenience.
Building software internally provides you with ultimate flexibility. You are responsible for the architecture, design, user interface, and maintenance down the road.
Purchasing software, while providing speed, reduced initial expense, and proven features supported by vendors, still provides quicker deployment, reduced initial expense, and proven features.
While the two choices are acceptable independently, the best choice is subject to a few variables—business requirements, funds, resources, and willingness to push.
When to Choose Building Custom Software
Custom software development is viable if your business is specialized or you’re providing services no off-the-shelf software can completely support. The following are when developing could be beneficial:
- You Need End-to-End Customization
If your operation requires workflows, functionality, or integrations not provided by any off-the-shelf software, developing provides the flexibility to change each smallest detail according to your requirement.
- You Need an Edge
Custom software is something that can be a differentiator and competitive advantage. Consider Netflix’s recommendation algorithm or Amazon’s price algorithm in real time.
- You Have the Long-Term Vision and Resources
Software development is a long-term play. It requires an excellent development team, a good plan, and regular maintenance. If you’ve got the vision and resources to see it through, the payoff can be tremendous.
When Should You Buy Software?
There are close to any number of situations in which purchasing software isn’t only smart—it’s the smart thing to do. Off-the-shelf solutions can meet average business requirements affordably and efficiently.
- You Require a Rapid, Certain Solution
Timing tends to be the deciding factor. Off-the-shelf software allows you to speed to market, particularly if you require CRM, accounting, or project management software.
- You Have a Tight Budget
Early expenditures in software procurement are generally less than in creation. You also escape the hazards and possible setbacks in software creation.
- You Require Vendor Maintenance and Fixes
When purchasing software, you generally have professional assistance, updates, and bugs fixes—at benefits that can keep you from technical headaches and hours.
Build vs Buy Software: The Key Points to Consider
In determining the build vs. buy software dilemma, the following key considerations should be made:
- Cost
Build: High up-front cost but possibly lower cost over time if properly maintained.
Buy: Lower up-front cost, but recurring subscription cost and possible integration cost.
- Time to Market
Build: Months to plan, code, test, and deploy.
Buy: Deploys in weeks or months.
- Scalability
Build: Scalable by your own custom company growth and semantics.
Buy: Can mean switching platforms or costly upgrades as needs change.
- Maintenance
Build: Your programmers take care of bug fix, updates, and optimization.
Buy: Maintenance is taken care of by the vendor, and your programmers can attend to other tasks.
- Security
Build: Enables you to have solid security controls that are specific to your industry.
Buy: Riding on the vendor’s security culture—some of which won’t be what you need.
Industry Examples: Build vs Buy in Action
Let us observe how actual companies tackle the build vs buy software dilemma.
Startups and Small Businesses
Small businesses will purchase software. Accounting in QuickBooks or marketing automation in HubSpot are plug-and-play on a budget. They enable startups to grow without needing to build.
Mid-sized Companies
They will probably do a hybrid. They will purchase a CRM but create an in-house analytics product that is extremely conversational to their internal data stack.
Enterprises
High-complexity, deep-pocketed large players will be motivated to create proprietary solutions. Facebook, for example, has constructed nearly all of its infrastructure from scratch in an attempt to accommodate its gargantuan size and customization requirements.
Summary of Pros and Cons: Build or Buy Software
So, Do You Build or Buy?
No one answer. Build vs buy software decision is based on your company size, goals, and technical expertise. Utilize the following simple decision matrix to assist you:
Choose Build if: You need special functionality, are able to plan long-term, and can absorb ongoing development.
Choose Buy if: You need quick deployment, have similar needs, and prefer lower up-front costs with support.
Hybrid Approach: Best of Both Worlds
Increasing numbers of companies are opting for a hybrid approach—a core system is purchased, followed by custom modules built on top. It’s the best of proven solutions plus the advantage of flexibility of customization, which lets you experience being customized without beginning from scratch.
The build or buy software dilemma is not a tech decision—it’s a strategy decision. Building provides complete control, and buying provides speed and stability. If you examine your short-term and long-term objectives, technology foundation, and cost factors, you’ll arrive.
Conclusion
The further along technology becomes, the narrower the divide between building and purchasing will become. Adapt, keep a close eye on your business’s requirements on a regular basis, and do not be afraid to alter course when circumstances change.
