Knowledge, Ideas and News
In Part 1 of this discussion, we discussed the advantages and disadvantages of developing custom software versus purchasing Out of the Box Software (OTBS). Now that you have a sense of the pros and cons for each approach, how do you go about deciding which way to go? What are the key considerations?
OTBS is generally suitable if you have basic needs that will remain relatively static and you are constrained by budgets. You may also want to lean more toward OTBS when it meets a large percentage (>80%) of your requirements.
Our experience has been OTBS will rarely meet all of your needs.
Compromises in business processes or workflow are made to accommodate the software. And your business will evolve. Unless you have significant influence with the OTBS vendor, desired software requirements will never be built or aren’t released when you want them.
A myth exists that custom software projects are too expensive.
If you only focus on cash costs to develop the software, then yes, customer software is “expensive”. But think long term and view a software initiative as an investment instead of an expense. Factor in all costs and benefits: one-time development expenses, training costs, new business generated, increased efficiencies, elimination of licensing fees, etc. The ROI analysis may indicate the OTBS is actually more expensive in the long run.
If you are concerned with the ability to support a custom solution with internal resources, hire a reputable software development vendor to build the software and support it for you. As your software matures, it will become just as stable (or more stable) than OTBS, you won’t have to worry about devoting internal resources to support the software and you have exactly what you want.
Our three final pieces of advice when deciding to build versus buy software:
- Conduct a thorough analysis to understand true costs and ROI of a decision.
- Don’t rush. It’s rare that a company needs the new software “yesterday”. You’ve already waited this long. Think through all the pros and cons and make a wise choice.
- If you do select OTBS, assess what aspects of the software work and don’t work for you. If the delta is minor you’ve picked a winner. If there is a sufficient gap between how it works and how you want to work then consider a future investment to build software that works precisely how you want.
Good luck exploring your options!
If you need some assistance making the choice or want to work with a vendor to help you design and build a custom solution, feel free to give us a shout. We’ve helped clients navigate this decision many times.