How Do You Know When to Buy Versus Build Your Software?

By Dalip Jaggi

Businesses of all different sizes today depend on various software applications to help them manage multiple core elements of their operations. These solutions support everything from supply chain management and bookkeeping projects to detailed project tracking and customer relationship management.

As businesses grow and evolve, however, they often reach a fork in the road where they need to decide whether to continue relying on highly accessible, ready-made software or invest in building a custom solution that’s specifically designed to fit their needs.

The truth is, there is no perfect answer to this question, and the best choice will depend on various factors unique to each business. However, by understanding the strengths and weaknesses of each approach, you’ll be able to make a good decision for your organization that will help it achieve its long-term goals.

What are Ready-Made Software Solutions?

It doesn’t matter what industry you’re in – there’s likely an abundance of ready-made software solutions available for you to take advantage of. These solutions, often called “enterprise solutions,” are built to be useful for a wide range of business types and can be particularly helpful for larger companies with intricate organizational structures.

One of the major benefits of these solutions is their high accessibility. They’re incredibly easy to purchase, and once you’ve set up an account or paid your subscription, you’re essentially ready to go. Depending on the software’s purpose, your organization could quickly see improvements in various areas.

However, while ready-made solutions offer versatility, their design can also be somewhat restrictive. Because they primarily focus on catering to a broad spectrum of businesses and industries, they often include a range of general features, some of which may not be relevant or valuable to your specific needs.

How are Custom Builds Different?

Custom software development differs from ready-made solutions since it provides a completely custom experience. It’s similar to going to a custom tailor to purchase a hand-made suit rather than just purchasing one off the shelf at a department store.

The main purpose of moving forward with a custom software build is to maximize the value of your investment. Instead of purchasing a generic software package with numerous features you more than likely will never use, you receive a comprehensive solution made exclusively for your business needs, ensuring minimal resource waste.

Naturally, developing a solution from scratch comes at a premium cost. The price of custom-built software can range from thousands to hundreds of thousands of dollars for larger organizations. However, these solutions are designed to unlock a business’s full growth potential which could very well lead to substantial returns on investment over longer periods of time.

Questions to Ask Yourself When Deciding Between Buying or Building Software

Choosing between purchasing or building software is an important decision to make. Each business should carefully evaluate its own specific requirements and budget constraints before deciding.

To help guide you through this process, consider these four key questions:

How is the Software Going to Be Used?

Each software application is designed with a core objective in mind. It’s important to ensure this objective complements your unique business goals.

Remember, many businesses share common needs, whether it’s improved financial management, better team communication, or so on. However, software solutions may not cater to every industry’s unique scope and could lack key features crucial for success in your particular sector.

If the software offers the competitive advantage and desired functionality you’re looking for, it’s worth looking into more. But, if essential elements are missing, think about exploring whether a custom solution better suits your needs.

How Will the Structure of My Company Impact Implementation?

When considering a custom software development project, it’s important to assess your organization’s current structure and capacity. Smaller businesses or those with limited resources might find it challenging to manage these types of projects. Even with outsourcing, significant internal collaboration and resources are crucial for successful implementation.

If your teams aren’t equipped to handle larger projects, consider using a ready-made solution, if not for anything but a temporary solution. This approach can be more efficient until you’ve scaled your workforce and have enough support to assist with a larger-scale development project.

What are the Features I “Want” Versus the Ones I “Need”?

Adapting ready-made software to perfectly suit your company’s needs is many times challenging or simply not doable. Often, these solutions come with limitations on customization, similar to how home renovation project scopes are limited to the foundation of a home.

To help you decide on the right path, it’s important to distinguish between the features you “want” and the features you “need.” While compromising on certain features is sometimes necessary, you can’t afford to settle for software lacking the core functions your business needs to grow.

If your research shows that many ready-made software options fall short of your requirements, consider exploring custom software solutions.

How Many Resources Can I Afford to Invest?

When considering software options, budget is a crucial factor. Ready-made solutions generally offer more transparent pricing, making it easier to predict your initial investment.

Just like when renovating a home – custom projects can come with unforeseen expenses, both during development and for ongoing maintenance, upgrades, and security.

However, with custom software, you have the power to design the development roadmap and prioritize your spending. While a ready-made solution might seem cheaper upfront, the long-term benefits and cost savings of a custom solution could be more advantageous for your business.

Find the Right Fit For Your Business Needs

The market is flooded with software options that businesses can use to help them expand. However, before committing to a recurring subscription model, it’s important to weigh the factors discussed and think about whether a customized software solution might be a better idea to explore.