How to choose between investing in the development of custom software or buying a software package from the market?
This is a recurring question that all companies are confronted with regardless of their size.
Indeed, when the company chooses a tailor-made internal development, this can involve resources directly hired by the company or the delegation of the need to a specialized company.
Several lines of analysis should be considered before answering this question:
Study the business challenges
- Is it a question of responding to a strategic need in a core business providing a competitive advantage?
- If the core business concerned is standard, without an added value that clearly contributes to a competitive advantage for the company, then it would be relevant to study how to adapt the internal work processes so that they are aligned with those of the market around a standard software package providing the best operational efficiency at a cost that does not degrade the profitability of the activity.
- If, on the contrary, the business concerned provides a sufficiently differentiating competitive advantage then it is undoubtedly appropriate to study a tailor-made software response that would not be covered by an existing software package on the market.
Set the Deadline constraints
- Is the need so urgent for my business that it cannot wait for the time to achieve internal development?
- If I am pressed by a critical or strategic deadline which can only be guaranteed if I buy a product on the market that is faster to install and deploy than the time necessary for the implementation of a product that I have developed internally then the decision is simple.
Set the Cost constraints
- Do I have the budget to carry out internal development?
- Generally, an internal development has a higher investment cost at start-up than if I buy a software package on the market;
- But in the long term, internal development is generally more profitable than the software package which can generate dependence on the publisher with constrained and increasing maintenance costs.
Assess the Risks
- Risks embarking on internal development:
- Do I have sufficient internal skills or could I recruit what I lack to achieve internal development within a budget and a timeframe satisfactory for my business? Can I delegate this development to a specialized company that has the resources available to achieve it while respecting budgetary constraints and deadlines satisfactory for my business?
- Do the technologies necessary for the development of my product already exist or do I have to go through R&D stages, the cost / time impacts of which may be difficult to anticipate?
- Risks in embarking on the purchase of a software package:
- Can I afford to pay for maintenance over the long term?
- What are my contractual guarantees: reversibility? maintenance commitment? adaptability of prices to changes in my needs?
- How flexible is the software package: adaptability of functionalities to changes in my work processes?
- What is the product plan? Will the publisher be sufficiently attentive to the market so as to anticipate additional features that will become essential for my business and from which I will be able to benefit without surprises in terms of pricing? What solutions are proposed for integration with the systems already existing in my company in order to guarantee a digital continuity to my users? What is the publisher’s support policy: will I have sufficient resources to support me in the integration and deployment of the software? What is the proposed escalation chain and is it compatible with the operational performance requirements of my company?
KONLI CONSULTING can support you for a structured audit of your needs to help you make the right decisions that will prevent you from embarking on a path that would have negative long-term consequences for your business. Do not hesitate to communicate your needs to us!
How to choose between investing in the development of custom software or buying a software package from the market?