With the progressing software solution development taking place in the market right now, the dilemma of building a software from scratch or buying it from a team exists vastly throughout all the industries. Especially in the IT sector, the thought of building a web or mobile software solution all by yourself might mean that you can customize the whole function according to your needs.
However, the effort and expertise put into developing a software might result in a big opportunity cost that could be utilized someplace else. On the other hand, buying a software saves you from that hassle and serves you with a designated software as well, but is it really what your company wishes for? Is it guaranteed to be satisfactory? Here’s the list of things you should consider before making the decision of building or buying a software.
Budget and Costs
To start off, let’s talk about one of the most essential factors while making a decision regarding a company- the financials. While preparing a budget, the management assumes costs like software development cost, maintenance cost, legal fees, and several others related to the software development. When you’re buying a software solution from a development team, assuming and predicting these costs are easy. The software development team hands you the list of costs you shall incur due to the purchase of the software, upon which you can make your budget and take the decision of buying from them or not.
This method allows you to predict the financial values as close to the actual values as possible; a company’s financial objective primarily aims for the difference between predicted and actual value to be minimal- buying the software solution does that for you.
On the other hand, building a software solution from square one tends to incur costs in places you might not even have an idea about. All the costs are distributed in various parts and not accumulated as one, unlike the purchase price you had seen previously. This further indicates the hidden costs of repair and maintenance that come along with the overall building cost of the software.
Moreover, these expenses are on the unpredictable nature as they are difficult to assume properly. In addition to that, you have no full proof evidence that your company shall have sufficient funds to maintain the software after spending an unpredicted amount on the software itself. This makes the budget preparation tough as well, since the big gap between the predicted and actual values is inevitable.
Time To Market
The time to market of a company is the duration it shall take for the product (software, in this case) to reach the available market. With the IT sector, the time to market requires to be as less as possible due to the immediate need for the product. In this scenario, a company has to work fast and efficiently to serve the market with their desired software solution and to retain customers by taking less time to market.
Building a solution takes time to plan and strategize the design, implement it in the process, ensure cost-effectiveness, and then go back to make further changes according to the market demand. This procedure takes at least a couple of months or years even, depending on the time taken and the qualification of the in-house developers. Whereas, buying a software from a third-party requires you to only integrate the software into your system and advertise it properly.
This saves the month of work and alterations. Moreover, the software outsourcing development teams serve for the sole purpose of giving you the ideal software solution within as less time as possible; this is their job, and this is what they do. Hence, their work and time to market tends to be quite less than that of an ordinary company. This is pretty understandable since other companies have other operations to carry out as well.
Technical Literacy
In the IT sector and overall software development, technical literacy plays a key role. As a firm, your in-house developers might have great efficiency and productivity, but does their technical knowledge surpass that of a software development company? The comparison should be carried out in details, as it gives you the definite answer if you should buy or build the software.
If your in-house employees have the ability to build the software solution and carry out the whole procedure with successful integration, there’s absolutely no need to look for somebody else to do it for you.
However, there are underlying issues that comes with building a software, which might not be a cup of tea for most in-house developers. If the lack of technical literacy emerges during those times of crisis, you shall incur time and money loss that’s non-refundable. In such a scenario, it is better to opt for purchasing a software at the beginning and utilizing the manpower to integrate it only.
Core Business Objectives
It all comes down to the resources you have as a company, and whether your core business objective is to utilize those resources. Companies with sufficient resources with the core value of implementing or creating new technology should most definitely opt for building their own software. It can be personalized according to your needs, and you do not have to wait for a third-party to make any changes for yourself. Moreover, you know the demand of your customer base more than any third-party ever will. Hence, building the software shall fulfill your objectives as well as provide customer satisfaction.
Delivered Value
Another vital factor to consider before making the buy vs build decision would be the delivered value of your software. A new software solution might not have proper functionality right off the hook, whereas a software solution that has been modified over the years by a team shall provide better outcomes.
Bottom Line
It depends a lot of your company’s nature and objectives whether you should build a software or buy it. While building gives you the personalization with no waiting time, buying a software reduces your time to market and overall costs. Choose the one that fits your company the best!