Building vs. Buying Software: Which Option Is Best For Me?
Building vs. Buying Software: Which Option Is Best For Me?
Nearly every element of the business world, from communication and customer relationship management to billing and marketing, relies on information technology (IT). Electrical utility companies aren’t exempt from this — from training employees to managing safety compliance, there’s no shortage of tasks that have become automated. If you hope to compete in today’s business world, you’ll need to leverage enterprise software if you desire to drive growth and improve your operations.
What Is Enterprise Software?
With over 3,000 electrical utility companies in the United States, you must make your company stand out through high-quality services supported by strong safety practices. One of the best ways to boost your business is by adopting enterprise software.
In essence, enterprise software is a technology used to help businesses reach their goals. More and more companies are turning to enterprise software to help meet their needs, contributing to the market increasing by 9% in 2019 alone. Functions commonly found in this type of software include:
- Supply chain tracking
- Workplace safety features
- Inventory management
- Customer interaction management
- Online security
Due to the pivotal role of technology in the success of enterprises, an increasing number of organizations are searching for a new software system to optimize operations and edge out competitors. This search usually ends with the same old question — should I build or buy software?
In the past, most organizations turned to their internal IT teams to build custom applications that seamlessly integrated with already existing systems. However, the cost and time it takes to build in-house software — coupled with the ever-changing needs of consumers — has led to fewer organizations employing their own IT staff.
There’s no universal solution when it comes to buying or building your software. The most you can do is evaluate your personal needs, consider both pros and cons, and try to make the most educated choice.
Factors to Consider
Faced with whether to build or buy, enterprises have to select the approach that promises a scalable, cost-effective technology that can address both the businesses’ immediate and long-term needs. Here are some of the factors you should consider when making a decision:
- Your budget
- Your in-house team’s skills
- The size of the software
- The amount of time you have
- Your desired levels of customization
The first thing to consider when choosing between building and buying is your budget. Ready-made software has more transparent costs than self-made software — while you can make cost estimates, you cannot be certain of how much money your in-house software will cost until the project is complete. You should also consider the talent of your in-house team: is the team capable of completing this project? Would their resources be better spent elsewhere?
Your team’s ability to create effective software depends in part on the complexity of the software itself. Creating a simple system to carry out a few tasks is much easier than crafting large-scale, adaptable software. Moreover, building software takes far more time than buying it.
The last thing to consider is how customizable you want your software to be. While a ready-made solution can meet several of your needs, it’s unlikely to meet 100% of them. Is customizable software vital to you, or can you adapt to different versions?
These are a few of the questions you need to think about as you start your software journey. To help you make the right decision, here’s a closer look at the differences between building and buying, as well as their respective pros and cons.
Building Your Own Enterprise System
If you’ve scouted the market and failed to find an existing software solution that meets your business needs, you might be considering just going ahead and building your own system. But before you rush over to your IT team or start hiring specialists, let’s look at some of the advantages and disadvantages of this method.
Here are some of the pros of building your very own enterprise software.
Everyone wants software that aligns with their business objectives, which is one of the biggest reasons many companies create their own customized solutions. If you have the resources and expertise to build a solution that aligns with your core values and objectives better than existing solutions, it makes sense to develop software in-house. Since you are involved in the building process, you can add new features as needs arise and even incorporate employee feedback.
If you are the sole owner of the software solution, you have absolute control over the software features such as user options, security, and updates. You also own the software code and can thus market and sell the solution as a SaaS product.
Given that in-house software is built to suit your business’s unique needs, you can include some special features that your competitors may not have. You can even turn these features into unique selling propositions and use them to get ahead of your competitors.
Here are some of the cons of building your own software
Homegrown software may seem like the less expensive option initially, especially if you already have a team of experts on hand. However, it’s important to remember that buying your software comes with its fair share of expenses, such as:
- Training and management fees
- In-house research, development, and management costs
- Regular maintenance and update costs
The initial investment of time, resources, planning, and personnel is relatively high for building your own software. Consistent maintenance and upgrades also contribute to the costs.
It’s worth noting that when you build your own software, you cannot be 100% certain of the costs or the software functionality until after the project is completed. A McKinsey-Oxford study revealed that one retailer spent over $1.4 million building complex software, only to abandon the project because it didn’t meet their initial expectations. Thus, you should be prepared for the possibility of going over budget.
Building your own software takes time and effort. Not only does your IT team have to learn about your organization’s workflow processes, but they also have to identify ways to improve them. This takes time away from day-to-day operations and other tasks that may be more beneficial for your business.
Ultimately, creating in-house software will take you anywhere between six months and a year. If you add the time it will take to refine and upgrade your software to reach the standards of similar software already in the market, it may be years before you can enjoy the total value of your system.
Lack of Scalability
One of the most significant drawbacks of building your own software is that it can be difficult to scale it to accommodate your growing needs. Whereas ready-made solutions can easily be adjusted for a price, house-made ones require extra research and development if you hope to scale. Considering that most businesses grow between 15 and 45% a year, managing an in-house system may become frustrating over time.
Buying an Enterprise System
If you’re ready to deploy a software solution today, then you might be better off buying an enterprise system. However, before you rush off to Google to try and find one that meets your business needs, let’s examine some of the pros and cons involved.
Here are some reasons why you should consider buying an enterprise system.
It goes without saying that you want a cost-effective and practical solution for your company — to find this, you have to start by analyzing your budget and the costs of buying and building software.
When directly comparing the two, a third-party solution may seem more expensive in terms of upfront or subscription fees. However, these costs cover a wide range of expenses, including software maintenance, storage, and upgrades. Moreover, prices are generally transparent and predictable, which reduces the risk of suddenly no longer being able to afford the software.
According to Forbes, the average business owner values their time at about $170 per hour. How important is time to you? Does your business need the software solution immediately, or can it afford to wait for months, even years, for your IT team to complete the software development process? If the need for the software is immediate, then purchasing a ready-made solution is the way to go — once it’s acquired, it can be integrated within days.
More Time To Focus On Other Tasks
Buying software gives your IT team the time and space to focus on your primary business objectives instead of the complications of software developments. It also gives you more time to focus on your business goals, as you end up saving on human resources, finances, and legal resources. By building rather than buying, you’ll find yourself spending more effort on software development and neglecting areas of higher business impact.
Building your own software gives you complete control over the system, helping ensure that your every need is met. However, this control comes with a lot of responsibility. Technology is constantly changing — computer speeds, for example, double about every 18 months.
If you build your own software, it’s your responsibility to modify it consistently and meet current technological expectations. Purchased software, however, usually comes with automatic updates that adjust to meet the demands of the ever-changing technology landscape.
Here are some of the drawbacks of purchasing a ready-made solution
Buying software doesn’t give you 100% control over the operations. If you think some changes should be made, you can always give feedback, but you can’t necessarily enact those changes yourself. However, in exchange for less control, you don’t have to worry about implementing upgrades. As a general rule of thumb, you should consider buying software if it meets at least 60% of your requirements.
Pre-built software usually comes with many integration features — however, you might discover that some of these are incompatible with the software, programs, or devices you’re currently using. Moreover, if you bring in a new program in the future, it may be hard to reconcile with the enterprise software.
Should I Buy or Build?
Now that you’ve reviewed the pros and cons of building and buying your own software, it’s’ time to make a decision: should I buy or build? The answer depends on your own business needs, including:
- Customization needs
- Company scalability
- Long and short-term goals
Building your software may be a good option if your needs are simple and not immediate, you desire customization, and you have both the time and resources to see the project through. However, there’s no point in investing effort and money into developing software similar to versions that already exist in the market.
Not only does ready-made software generally outdo the complexity of in-home software, but it also comes ready for deployment and prepared for updates. At the end of the day, if you’re looking for a complex, high-tech, and practical software solution, your best bet is to buy it.
Finding the Right Software For Your Needs
Deciding to buy your software is just the first step — next, you have to find high-quality, comprehensive software that adds value to your business. This is especially important if you work for electric utility companies that have stringent safety guidelines to follow. At Field1st, we’ve put in the research and development effort to create a product that protects your employees on-site by boosting preparation through real-time relevant safety training.
Our software provides a workable solution that field crew, leaders, training support, and IT teams can easily leverage and use. Our enterprise software was designed with your well-being in mind, from site safety inspection features to hazard identifications and training functions. It even comes with customization options that you can adjust to your specific requirements. We take care of the technology end of things so you can focus on core competencies.