A few years ago I attended a conference for SMEs seeking eBusiness advice for their operations. The speaker (a self-professed expert on eBusiness) suggested that building a custom application in this day and age makes no sense when off-the-shelf (OTS) applications are available for nearly any conceivable function at a fraction of the cost of custom development.
My disappointment at her remarks stems from a long career that has proven time and again that the debate on “buy versus build” is rarely that simple. Here are a few reasons why:
Overall Cost: The price dimension alone offers plenty of complexity. OTS products may have hidden long-term costs such as license, maintenance and service level contracts, upgrades, platform changes, training, or implementation and installation costs that set their overall cost of ownership above the custom-built price tag.
Functionality: As far as features are concerned, any OTS application will have limitations in functionality out of the box. So, if you need a multifunction solution you may have to buy more than one application to cover all your requirements, while a single custom solution can be inclusive. Moreover, an OTS solution may have many features you do not need and yet you are required to pay for the full package.
Process Fitness: Suitability may also be an issue in this debate as many in the OTS camp will try to sell you a solution that is “close” to your need – suggesting you rebuild your business processes to fit the software gaps. While I am a big fan of business process re-engineering, sometimes your unique business processes represent your competitive advantage. Forcing you to fit your business to a solution instead of the reverse is like forcing square pegs into round holes.
Many of the projects we have completed for our major clients identify a viable third option – integration. Integration is a combination of third party products with custom development. In the case of one recent build it involved developing a custom web-based access to connect to a commercial desktop solution. Our research indicated that while the initial price was about the same for upgrading to a different product with the enhanced functionality the client was seeking, the long-term return on investment was substantially better for an integrated solution. The approach offers future economy and scalability – important values for the client that take long-term cost and other benefits into consideration.
No one can tell you whether you should buy or build without a thorough needs analysis. Avoid “ex-spurts”* who present the buy-versus-build argument as a foregone conclusion. Be sure to complete a full ROI calculation on any solution you implement – whether you buy, build, or integrate.
*”Ex-spurts” is a term I use to describe the false prophets of the consulting profession and comes from a humorous quip about experts that states that an “ex” is a has-been and a “spurt” is a drip under pressure.