Buying vs. Building Software: A Decision-Maker's Guide

For many business leaders, a common question that is constantly asked is whether to develop custom software or buy an existing solution to fill your business’s needs.

These days, SaaS (Software as a Service) options are plentiful and convenient, but their costs can add up quickly. Alternatively, creating custom software can also require a significant investment of time, money, and resources.

This dilemma is similar to everyday decisions we all face. Should you cook at home, spending time and effort on meal preparation, or dine out for convenience? Do you fill out your tax forms yourself or hire an accountant to handle them? Both choices have their advantages and drawbacks.

To decide what's best for your team, it is crucial to weigh the pros and cons of building versus buying your next software solution. Our evaluation will help you determine which option aligns best with your specific requirements and objectives.

Pros of Building Software

Customization

Custom software allows for tailored functionalities and features, ensuring that the end product will most closely match the intended purpose and user needs.

Competitive Advantage

Proprietary software can be a key asset in achieving strategic business goals such as productivity, customer experience, optimized operations and staying ahead in the market. It also becomes an asset of your company as a form of intellectual property (IP).

Integration with Existing Systems

Custom software can be designed to seamlessly interact with other tools and platforms already in use, reducing redundancy and enhancing overall efficiency.

Scalability

Unlike off-the-shelf solutions, which may have limitations, custom software can be designed to handle increasing workloads and expanding functionalities as your organization grows.

Security

You can prioritize security features and protocols, ensuring that sensitive data is protected according to their standards, which can be more stringent than those of generic software providers. This is particularly important within industries such as healthcare, financial services, and the public sector.

Cons of Building Software

Higher Initial Cost

Traditionally, the financial investment required can be a barrier, especially for small businesses or startups with limited budgets. However, new technologies and approaches to software development such as low-code and no-code development can significantly reduce the cost to build a custom solution.

Time Involved

The time taken to bring a brand new software product to market can be longer compared to adopting off-the-shelf solutions. Planning is required to ensure the deployment of the software is aligned to its employee-facing or customer-facing rollout.

Complexity and Risk

Issues such as scope creep, unexpected technical challenges, and changing requirements can lead to project overruns in terms of both time and budget. Managing these risks requires experienced project management and a flexible development approach.

Maintenance and Support

Ongoing maintenance such as fixing bugs, updating software to keep it compatible with new hardware and operating systems, and improving functionality based on user feedback are an investment you must plan on making. Ensuring continuous support can be resource-intensive and requires a dedicated team.

Dependence on Key Personnel

Building and maintaining custom software often relies heavily on a few key individuals who possess in-depth knowledge of the system. If these individuals leave your organization, it can create a knowledge gap and disrupt the continuity of support and development efforts.