New Software Project: Should You Build or Buy?

Business.com / Technology / Last Modified: February 22, 2017

The choice between building or buying software depends on business requirements and the cost of development, implementation and support.

It is a frequent and suitable query in the journey of organizations to implement a cost-effective and efficient IT solution that involve membership and meet the specific needs for partnership.

On one hand, organizations are attracted to modern software development to build unique and targeted software solutions that meet their goals and fulfill their requirements.

On the other hand, they have the option to buy pre-built software, which is known as Software-as-a-Service (SaaS).

The choice between the two depends on the business requirements and the cost of development, implementation, and support. While both choices have some merits and demerits, the growing global technology infrastructure generally known as The Cloud is altering the total cost of ownership and overturning the long-held assumptions about the purchase of business software. We will take a look at the pros and cons of each option.

Related Article: 5 Technology Trends That Have The Power to Change Your Business

The Case for Build (Pros & Cons)

The traditional approach for many businesses is building or hiring the creation of a custom collaboration and it seems like a logical direction for many organizations. If the requirements are very unique, then building a one-off solution is an effective choice. It allows to design and implement a system to fulfill the needs and process unique requirements. Also, if requirements change then you can control the development of the software.

IT staffing and technical expertise

If an organization decides to build a software, there are several factors that can play a huge role in its success. Firstly, be sure that you have the right IT staffing and technical expertise required for developing the software. The working team must be aware of the legacy systems, current technologies and the interconnection between them.

Defined Requirements

The revisions and delays can be avoided by defining clear requirements of the software before the development process begins, and the development team must have a clear path to focus on the project, with clear objectives and milestones that continue deployment of the system and its maintenance and upgrades.

Many in-house development struggles require integration between the current legacy systems and the new application under development. This approach highlights the need for a high level of sophistication among in-house IT team.

Merging existing infrastructure with new software applications that could include customer relationship management, content management, membership management, or collaboration tools may mean modifications to several systems simultaneously. This approach may seem favorable for maintaining familiar systems for the benefit of legacy staff, yet again, the success depends on clearly defined requirements and stable long-term IT budgets.

Related Article: SaaS Marketing: Expert Tips for Improving Customer Retention Using Content

The Case for Buy (Pros & Cons)

The Cloud

A few years ago, the phrase "The Cloud" wouldn’t have meant anything to us. But today, it is synonymous with a level of storage, data security, flexibility and accessibility that was formerly unapproachable to everyone except the leading IT shops.

Software-as-a-Service (SaaS) has become a preferred delivery method for business applications that include accounting, project management and customer relationship management (CRM), and it was made possible by cloud technology.

Software-as-a-Service (SaaS) Provider

Software applications are delivered through the web and it is hosted, developed and managed by the provider of SaaS. The SaaS provider takes the responsibility for hosting, maintenance, application development, backups, network infrastructure, monitoring, and security. New features, performance enhancements, and security patches are arranged continuously, and dedicated system administrators look after the network infrastructure and hardware to ensure the availability and reliability of the system.

Assigning IT infrastructure tasks and responsibilities to an external provider can be beneficial for the organization. In the short term, the organization will gain a better understanding of the cost outlay and the internal budget of IT can be refocused. The organization can also focus on its core business activities without the interference of complex software development and projects.

With time, the organization will probably notice that the reliability, security, and quality of applications have increased as now you have a vendor who is responsible for the quality of service. SaaS vendors are capable of applying new technologies like, virtualization, so each subscriber enjoys the full benefits while pays only a tiny share of infrastructure costs. Developed SaaS solutions offer the business-specific functionality along with earlier generations of in-house products while preserving the primary SaaS benefits of quality of service, continuous payment and economies of scale.

Relative weighting of cost categories in IT Spend
Relative weighting of cost categories in IT Spend

According to a research conducted by Gartner Group in 2012, most companies are planning to shift IT spending towards SaaS solutions. Most of the implementation has been recent, in agreement with improvements to SaaS offerings and enhancements to Cloud security. It was also found from the research that 71 percent of organizations have been using SaaS solutions for less than three years. The report also states that initial concerns about response time, service availability and security have been diminished for many organizations as SaaS business and computing models have developed and adoption has become widespread.

Conclusion

Building a custom solution gives the opportunity to design and implement a system specific to the requirements of the organization. The fundamental question is whether the business model can accommodate the risks of an in-house software development cycle and the long-term investment that comes in managing it. Software development requires a unique set of expertise, skills, and association leadership needs to assess whether those belong to their core business model.

Adopting a pre-built and configurable solution has become progressively attractive as cloud and SaaS technologies continue to advance. The Cloud technology approach is fast becoming the dominant IT model of the next era, as the surveys from industry analysts indicating significant growth in this technology.

Related Article:How an Effective Customer Success Strategy Can Prevent Customers from Ditching Your Product

Furthermore, the total cost of ownership data points to SaaS, as the increasingly economical and efficient choice. The key is to select a product that can be configured to the business requirements and to partner with a well-known and established SaaS vendor that you can trust to deliver great quality of service so that the organization can focus on its core business.

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