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Buy vs Build: When to Approach Custom Software Development

Tim Rayburn // August 3, 2022

Software Development

In the era of cloud computing and Software as a Service, the question of whether to buy or build has in some ways become simpler than ever.  Nearly every conceivable business operation can be managed and achieved by commercially available software.  Does this harken to the end of custom applications within the enterprise?  Perhaps not…

Always Buy

From customer relationship managers, accounting systems, and human resources information systems, you can purchase any software your company might possibly need on the open market today.  Because of this, the cost of developing and maintaining your own software for a particular solution may seem foolish, and in most areas it is.  But as you begin this journey, be careful what you wish for. 

Most enterprises first begin their own software development not to solve a core business problem, but rather to integrate two systems that they have purchased.  While there are some off-the-shelf integration suites available, even those require a level of detailed understanding of the internals of each system that will likely require some development expertise to implement.  The solution touted by Microsoft, Oracle, and others is instead to coordinate your purchases onto a single platform.   

This is a compelling argument certainly as it avoids the cost of custom integration by purchasing yet more from a vendor who has already thought of how their systems integrate.  Need a CRM which integrates with an ERP and a BI platform?  Both Microsoft and Oracle would be happy to sell you those answers. 

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Photo by Israel Andrade on Unsplash

Caveat Emptor

But the buyer must beware because there are dangers in the path of buying from one vendor.  The first, and most dangerous, is one of scope.  The second is the dreaded vendor lock-in. 

When choosing a vendor to purchase already integrated solutions from, you need to be considering a scope of your business that far exceeds where you are today.  You are not purchasing a CRM or ERP for the business you are today. Instead, you are subscribing to a service that needs to meet your needs for the next five to ten years at least.  Does the CRM platform do everything you can imagine you will need after 10 more years of growth?  Does it already integrate in the ways you need it to in ten years?  If not, then the vendor's solution may not be the right one for you no matter how compelling the price tag is.  Dream big as you engage in this deliberation, and make sure you’re ready for what comes. 

There is also the matter of vendor lock-in.  Much has been made of this space, and truly in the age of cloud computing, I find it frankly overblown.  Being “dependent on Microsoft” might sound terribly scary, but if you truly investigate your other solutions, you will likely come to realize they are also dependent on other major vendors.  If Amazon’s AWS Cloud has an outage, then you will see disruptions across the internet, from Netflix to Akamai.  At least one of the major cloud vendors is a part of every SaaS offering I’ve investigated in the last year.  Some diligence is required, but in the end, AWS, Azure, and GCP are all far more scalable and redundant than any self-hosted option you might find which avoids such lock-in. 

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Photo by Clément Hélardot on Unsplash

Integration as a Business

Finally, we must remember that many businesses exist exclusively because they have created integrated solutions to serve a particular market.  These software businesses still purchase many of their core systems, and most use cloud partners to enable scale, but it is the intelligence of their custom integrations that are in fact the business value of their business.  These businesses take many shapes and forms but solve real business problems and are the arena of most compelling custom software development these days. 

It is in these spaces that we are seeing technologies such as AI deployed to great effect.  From integrating with real humans, using AI conversational experiences and metaverse virtual storefronts, to the more traditional offerings such as outsourcing of paper and electronic bank statements.  These vendors create real value for the enterprises they serve by absorbing the custom application costs themselves. 

 In summary, the adage remains true still to this day:  Buy commodity solutions and build a competitive advantage.  Distinguishing between the two is where the art of business technology resides. Reach out to us to learn more about how you can successfully buy custom software development.

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