When should you buy a software package, build your own or customize a software package?
If your business relies on software, then it’s important that it’s flexible so it can evolve with your business as it grows and changes over time.
An effective software solution yields significant benefits to propel your business by:
- Increasing productivity
A quality software solution enables your organization to work smarter and faster. An integrated or centralized technology platform automates business processes, streamlines and reduces effort while storing all your information in an easily accessible location.
- Gaining an edge over the competition
Technology automates processes and gives you an edge by reducing overhead. It can even open up new markets for you that were once beyond your geographical reach. The possibilities are countless and are only limited by imagination.
- Responding and reacting to market changes
As business challenges emerge, having a flexible technology platform can give you the agility to shift on the fly. In certain competitive scenarios, it can even be the difference between success or failure.
If you’re looking to expand your use of software and faced with the choice of purchasing a packaged solution, building your own or a blend of the two there are a few things to consider.
Selecting a packaged solution
A packaged solution may be your best option under the following circumstances:
- Your business challenge is common
If your needs are basic (i.e. accounting) there are most likely a wide selection of options to select from that can both meet your immediate needs and give you the ability to grow without having to make a change.
- Your technology isn’t a competitive factor
Once again an accounting package isn’t designed to deliver an advantage in gaining market share. However, if the new package can be integrated with legacy systems then the new combined platform could yield additional cost savings.
- You have a limited budget
As you evaluate your options; building a solution, buying a packaged solution or customizing a package, keep in mind your ROI goals. The package may only address 80% of your needs and you’ll have to work around the remaining 20%. Budget constraints may dictate that you need to leave the remaining 20% for another day.
- Lack of capacity or access to the skills you need
If you don’t have access to a team of software developers or if your developers are stretched too thin, it might be best to consider a packaged solution, – IF – it doesn’t create complexity and inefficiency for the business.
- The flexible package
Many vendors acknowledge the 80/20 rule and allow their package to be customized or include features that allow data export/import. This flexibility gives you the ability to take advantage of the 80% and add custom features down the road so the final product uniquely fits your business.
Depending on the need, there may be just the right package out there that’s flexible, within your budget and delivers a competitive advantage.
Building your own custom software solution
Building your own may be more costly than a comparable packaged solution (if it exists), but if you build your own, you retain control of the development process and can create unique features or workflows that are specific to your business.
Here are seven reasons that favor building your own proprietary software.
- You’re in the software business
- Your business challenge is unique, and packages are designed to be generic
Software packages can provide a unique set of features and in many cases fill most of the needs you have (the 80/20 rule). However, if the remaining % gap is big enough, your choice will be to either build a custom solution or customize the package to fill the gap.
If your challenge is sufficiently unique there may not be a package out there. Building your own may be the only option you have for meeting your business goals.
- A new technology can be a significant advantage
If the new software or technology idea provides a distinct business advantage and the packaged option leaves too many gaps (i.e. mobile functionality, customer self-help, workflows), it might be best to start from scratch.
- Control
If you build your own solution then you have the ultimate control over the features, functionality, support and long-term costs associated with owning and operating a technology. You’re also free from a vendor publishing new versions which may or may not help your business.
- Packaged solutions can be rigid
If the packaged solution under review is closed or functionally rigid, customization may not be possible (i.e. modifying or adding features, integrating additional data sources or exporting data).
- The vendor’s upgrade plan and timetable are inadequate for feature enhancements
As business needs change, you want what you want when you want it. A vendor’s priorities may not align with yours. The good news is that many SaaS (Software as a Service) providers use a monthly subscription model that may compel them to listen to their customers and add features on a routine basis.
- Packaged solutions may not be compatible with other programs
If you already use software to operate your business, and you’re considering adding a new package to the mix, compatibility between the new and legacy is important. Will you be able to migrate your legacy data easily? Will you be able to integrate and streamline your processes into a single framework, or will the addition add complexity?
If the packaged solution doesn’t allow customization or offer compatibility features, you may be better off building your own.
Customizing a packaged solution
If you can find a package that’s within your budget, it’s flexible and delivers a significant portion of the features you need, you’re in a great position.
Many packages not only allow for customization, they encourage it. Vendors realize that we’re living in a time where their customers have more options than ever before and their competitive advantage is providing a high level of customer service. They may provide gateways that allow data imports/exports and some will even offer value added consulting and customization services. Be sure you know.
If you decide to build or customize a software solution, our article “Software Development – A Best Practice” offers a guideline for how to approach the process that will improve the odds for a successful project.
