Pros and Cons of Building VS Buying Software

Companies launching new products or platforms often face a pivotal decision early on – should we buy off-the-shelf software or build everything custom in-house with a Java development company?

Both approaches carry advantages and downsides relating to cost, timelines, features, security and more. This article explores some key considerations when evaluating these trade-offs.

The rise of cloud services and SaaS models has expanded the selection of turnkey solutions across categories like CRM, HRIS, ERP, CMS and more. These commercial off-the-shelf (COTS) packages promise faster deployment compared to building from scratch.

However, heavy customization may nullify these timeline gains. Integrating third-party software also introduces new security and vendor dependence risks not present with proprietary code. As with most decisions, the build vs buy analysis takes thoughtful analysis rather than knee-jerk reactions.

Pros and Cons of Building VS Buying Software

Cost Savings

Intuitively, buying software seems the cheaper route compared to paying developers to construct something new. And upfront this logic holds true, especially factoring in engineer salaries and infrastructure expenses.

But purchased packages bring recurring licensing, support fees and change request charges that may eclipse the capital costs over time, especially at scale. With software margins so high, investing in owned IP could pay dividends long-term.

The analysis shifts further to more complex use cases. Often off-the-shelf packages meet 80% of needs, with the remainder addressed through customizations.

This not only diminishes the speed advantage of commercial platforms but also layers expensive vendor professional services for custom code.

Companies also sacrifice future savings by relying on external systems versus expanding in-house tech. The total cost of ownership merits close scrutiny.

Customization

As mentioned, pre-packaged solutions only stretch so far when unique business requirements enter the picture. Consider a manufacturing company requiring sensors and internet-of-things connectivity with specialized shop floor machinery.

It’s improbable any COTS vendor supports these capabilities out-of-box without extensive modifications. By owning technology decisions end-to-end, product teams retain the flexibility to incorporate niche features like these.

Of course, custom systems require their own upkeep, whereas vendors handle backend updates for commercial clients. However, relying on vendor roadmaps leads to frustrating delays for new capabilities as every client competes for attention.

Building rather than buying software enables product owners to steer their own innovation cycles. The decision boils down to the level of acceptable standardization versus the need for customization.

Implementation Time

Conventional wisdom suggests that purchased software meets project timelines faster by leveraging existing code versus building from zero. But anyone purchasing enterprise platforms knows the slogan “weeks to install, months to configure” contains truth.

Integrating adjacent systems, modifying default workflows, mapping data models and testing for errors proves no quick task. Pre-built software only accelerates time-to-value if selected for organizational harmony rather than forced into ill-fitting molds.

With custom builds, longer upfront development pays dividends later by preventing configuration bottlenecks down the line. And with modern frameworks and cloud infrastructure, development velocity keeps increasing to close the gap.

Teams also avoid lags when relying on vendor issue resolution. Ultimately more factors than just the existence of code impact deployment timelines, especially at the enterprise scale.

Feature Sets

When examining build vs buy trade-offs, the feature comparison provides another assessment point. Commercial software wins here based on years of industry feedback and best practice repetition amassed into polished products.

Standups against mature incumbents leave most in-house options lacking by comparison. However over-served feature-bloat carries its own downsides that custom creations avoid.

Building software also unlocks the potential for truly differentiated capabilities that close competitors simply cannot copy from vendors.

Examples might include proprietary algorithms, patented user interfaces, or innovative applications of new technologies like AR and blockchain.

Carving unique feature niches makes the investment in custom development worthwhile, even if commodity functionality remains simpler to purchase outright rather than rebuild internally.

Vendor Dependence

Entering any software agreement marks the start of a long-term relationship with the vendor, for better or worse. Negotiating license renewals, change requests, add-on bundles and pricing fall outside buyer control.

Companies must also accept commodity status, with limited input into roadmaps or priority access to new capabilities. These tradeoffs and tensions grow as reliance on external vendors increases.

Constructing the technology stack from the ground floor certainly demands a heavy initial investment. But the payoff comes from owning decisions, avoiding lock-in, and retaining leverage in supplier relationships.

Insourcing software risks also fosters direct lines of accountability informed by end-user feedback. As with any partnership, weigh the tradeoffs of committing to outside software.

Security Considerations

Expanding the technology ecosystem with commercial software inadvertently increases the attack surface for cybercriminals to exploit. Integrating SaaS platforms opens new doorways into otherwise secure environments guarded by strict internal controls.

The advice “never trust user input” applies doubly for external code outside organizational ownership or visibility. Security teams rightly take a skeptical view of adopting third-party code stacks.

However, attempting to control all variables with homegrown code risks another sort of danger – accountability diffusion.

Spreading responsibility for a platform across many hands often leads to cracks as contributors assume someone else handles security scanning, penetration testing, patch management and other vital disciplines. Here again balance matters, using COTS for commodity needs while customizing mission-critical facets.

Conclusion

Deciding whether to build or buy enterprise software depends greatly on the specific circumstances and risk appetite of organizations. Buying allows faster deployments of mature capabilities, shedding undifferentiated heavy lifting to vendors.

But long-term costs and loss of control seem likely to outweigh gains. Hence many follow a hybrid “buy where we must, build where we can” approach, assembling the ideal symbiotic puzzle between COTS and custom.

With vigilance and governance, companies can thrive using the optimal blend of purchased platforms and in-house code unique to their culture and vision.

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