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Software: Buy vs. Build

September 13, 2018
By
Steve Danner
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In today’s cloud-first world, businesses are looking for software that they can get up and running FAST.  The minute a business is opened up, they will need software for ERP, time-keeping, payroll, accounting, line-of-business specific processes and more.  Many of these business processes are done pretty much the same way, regardless of industry.  Some business processes, however, must be done a certain way that might be unique to the industry, or even unique to the specific business.  One must consider all of these factors when choosing whether to buy a pre-packaged software product, or to have a software development agency build them custom software.  In addition, pre-packaged software often comes with on-premise versions, as well as cloud-based versions.

Challenge: Choosing software for a startup

You’ve got some venture capital, an LLC, the idea of a lifetime, and you’re ready to hit the ground running!  You have to get payroll and accounting up NOW.  You’re a startup with a dozen people or so.  As such, your needs aren’t all that complicated.  You need something that will do these overhead jobs without any fuss and just get you moving.  What should you do?

Solution

This is the prime candidate to buy pre-packaged, cloud-based software.  The reasoning is pretty simple.   If you’re just starting up, you likely don’t have a bunch of servers laying around, you likely don’t have a bunch of IT folks running around your office, and you most certainly don’t have the capital to spend on a custom made application for things that EVERY business deals with.  On top of that, if you’re a startup, you most certainly don’t have a set way of doing things yet.  There are tons of cloud-based software packages to do your accounting (Wave and Freshbooks just to name a  couple).  If you need payroll, there’s a fine cloud-based offering from ADP, and newer players like CloudPayroll and CloudPay.

If you pick these software packages early, you will likely end up forming your business processes around these software packages, allowing you maximize their potential.

Challenge: Choosing software for an established company

You are a fairly large, regional bank.  You’ve invested hundreds of thousands of dollars or more in custom applications in your company’s 30+ year history.  Your processes have been refined repeatedly to sustain your company’s growth patterns over that time.  You view YOUR way of doing things as a competitive edge over your competition.  Now, you find yourself in need of software that will automate loan applications, and you need integration into several other systems, some of them were purchases years ago from different vendors, while others were built over the years to aid in the business process that makes you unique.  What should you do?

Solution

This business problem is much more complex, and of course, requires a much more complex solution.  You’ll want to do some detailed analysis of what packaged products are out there.  If you’re highly invested in on-premise software, you’ll need an on-premise software solution to work with those existing systems.  If you’ve offloaded some of your software and infrastructure to the cloud, you might be able to consider a cloud-based software solution, but more than likely not.

The need for tight system integration is almost always going to require custom development of some kind.  You’ll often hear the term “integrations” thrown around, referring to the custom development needed to link 2 disparate systems together in a way that makes sense to your business users, and also performs well to meet your company’s demands.  3rd Party developers can be an extremely valuable resource in these cases as they have often dealt with a plethora of custom systems as well as the latest off-the-shelf software, smoothing the process of getting a new pre-packaged software up and running with your existing systems.

Finally, in cases like this, custom application development can still be the preferred choice for many companies whose process simply don’t align with pre-packaged software products, or if they can’t stomach the sometimes very high costs of ongoing maintenance for those products.  A custom software solution will often please your end-users, giving them EXACTLY what they want, with no compromises if done correctly!  Often times, custom solutions can even reside in the cloud if your infrastructure can support it, giving your users the high scalability and mobility they desire!

Competitive Edge

Your choice of software will impact your business and drive success.  It’s important to choose something that is going to make your users happy and productive, as well as scale up for you as your company grows.  A great software solution could even be the catalyst for your company to grow beyond imagination!  Choose your software partners wisely, look for a team who has a proven track record of delivering the right solutions to give your company the competitive edge you need!