As an entrepreneur or business owner, you’ve probably identified an area of your business where technology or software could add value, offer customers a better experience, or simply provide better efficiency. Now, the next step is to buy commercial ‘off-the-shelf’ software or build a custom solution.
In this article, Jose San Miguel, Managing Director at white label ticketing platform Nuweb Group offers businesses expert advice on how to decide between buying ready-made software solutions or starting from scratch.
As with most things in life, there are positives and negatives to both depending on your exact needs and budget. However, going down the wrong path might well be a costly business mistake, so it’s vital at the early exploration stage to weigh up all your options and make an informed decision.
Firstly, you need to know the problem you’re trying to solve in detail. What are the unique challenges faced by your company or industry, as well as those common to most businesses? If you operate in a popular industry, there are likely pre-made software programs available. However, building custom software may be necessary if you work in a specialised or emerging field.
Secondly, you need to work within your budget. Building in-house software can be very expensive. Consider the initial development costs, as well as annual maintenance and hosting expenses. In contrast, pre-made software solutions typically involve a one-time, annual, or monthly fee that covers support, maintenance, and hosting which makes it more affordable, but requires an ongoing investment.
Finally, the timeline and rollout plan is vital to get right. Assess how urgently you require the software. Developing a software program from scratch can take months or even years, depending on its complexity. If time is of the essence, purchasing a pre-made solution that can be up and running within minutes may be the more favourable choice.
The challenge of determining the value of building software in-house versus purchasing an external Software-as-a-Service (SaaS) platform can be daunting. While some consultants argue that building your own software is now easier than ever, it is crucial to acknowledge the potential issues that come with creating custom software, such as maintenance and system failure.
On the other hand, buying a pre-made program from an established vendor may provide convenience, ease, good value for money and still offer unique and bespoke functionality.
Businesses and brands should consider factors such as control, monetary costs, maintenance, opportunity cost, and time to value, to help evaluate which option is best for them.
Digital transformation decisions often revolve around the trade-off between speed to market and cost savings. This delicate balance can significantly differ across industries.
Carefully evaluate the benefits and drawbacks of each option, align them with your specific requirements, and select the approach that best suits your company’s goals.
It’s ultimately your choice where to deploy your resources. The important thing is to find the right path to develop the technology platform that suits your needs.”
Control
Build:
Building your own software grants complete control over the SaaS platform. However, this also means you’re responsible for every detail – from design choices to technical specifications.
Buy:
Choosing a pre-made SaaS platform requires relinquishing some control but offers convenience and ease. You can use off-the-shelf products as a base but some providers also offer customisations, meaning if you need to solve a specific need, the partner will build ontop of the core product a new UI, or integration, a payment gateway that is required. Depending on your industry and requirements, you are likely to find a platform that meets your needs. It’s important to note that purchasing technology or existing products from a SaaS company means you will not have control over the product roadmap.
Cost
Build:
The challenge is, if you’re looking for a fast and budget-friendly solution, building from scratch isn’t the way to go. In-house software can rack up some hefty expenses like development costs, ongoing maintenance, support, upgrades, hosting fees, and system repairs. A whopping one-sixth of IT projects over run their budgets by 200 percent. So, if you’re set on building your own thing, be aware of the hidden costs you can pick up during the discovery, designing, testing and implementation of your platform.
Buy:
With a pre-made SaaS platform, you only pay a subscription fee, which covers the costs of development and maintenance. As SaaS vendors serve a large customer base, they can offer their solutions at a fraction of the cost required to support a custom-built application.
Maintenance and Support
Build:
If you have a substantial budget, you can afford to maintain the software you build internally. However, consider the maintenance costs, such as bug fixes, user profile setup, user training, upgrades, and compliance with industry standards. Increased user demand may require additional bandwidth and staff.
Buy:
If the prospect of maintenance seems daunting, purchasing a pre-made SaaS platform is the preferable option. Your subscription fee includes all maintenance services, and you benefit from a dedicated support team.
Opportunity Cost
Build:
Opportunity cost plays a significant role in budgetary considerations. Allocating funds to building a highly specialised app may limit resources available for other business opportunities that may arise.
Buy:
By choosing a SaaS solution, you can allocate more resources and time to other sectors of your business while benefiting from a lower cost compared to building software from scratch.
Time to Value
Build:
Consider your goals and how quickly you must achieve them through newly-created software. Building a software program internally can take over a year. Assess whether you can afford to wait that long.
Buy:
Purchasing a SaaS platform provides immediate access to a complete program, allowing you to connect your goals to actions within minutes.
Ultimately, businesses and decision-makers need to weigh up both options and the choice will differ across a variety of factors. There is no right or wrong answer. As discussed the main benefits of building your own software is that it helps businesses with specific demands, can be fully unique and tailored, and give a competitive advantage. And the benefits of buying a solution mainly centre around cost, ease, and quick maintenance and support.