Buying vs Building Software - The Complete Guide

Making the pivotal 'Buy vs. Build' decision in software requires a fine balance between numerous critical factors.

We have crafted a detailed guide that breaks down the essence of this decision, tailored to help you navigate these waters with confidence.

The key components to consider are as follows:

1. Features: How to prioritise what you need over what you want.

2. Budget & Cost Efficiency: Evaluating the real cost implications over the solution's lifetime.

3. Time to Value: Calculating how quickly you can reap the benefits.

4. Adaptability and Future Proofing: Ensuring your choice can evolve with your business needs.

5. Maintenance, Reliability & Support: Anticipating the level of ongoing support you'll require.

6. Weighing it All Up: A methodical approach to sum up your options and guide your decision.
   

We've compiled crucial questions, factors to consider, potential paths, and mapped out the associated benefits, laying out a strategic framework to aid your 'Build' or 'Buy' analysis. This resource helps you assign weight to each consideration, tally the results, and steer you towards a decision that best suits your business objectives.

Remember, there's no one-size-fits-all answer. The best choice varies from one company to the next, hinging on the unique priorities and circumstances of your business.

Leverage our guide to make an informed, strategic decision that not only meets your immediate needs but positions you for future success. Feel free to down the document here - Buy vs Build

1. Features

If you build your own in-house solution, you must keep a constant pulse on your customers’ preferences and behaviours, as well as the needs of your brand, and be ready to adapt and innovate as necessary.

You will need to have the internal time, the right structures and resources needed to continuously innovate and enhance your homegrown solution –  without pulling too many resources from other important initiatives and your core revenue activity.

Building your own software will enable you to have the exact features you require as a business and match your processes. This will require a team of resources dedicated to designing features, reviewing the current feature set and managing internal end users to constantly improve the solution.

This aspect is already built in when it comes to a packaged solution. The vendor ensure that they will be updating their packages on a regular basis to improve features and functionality for your ongoing benefit. Although each SMB prides itself on its distinct needs, the core objectives they share can be remarkably similar – efficiencies, visibility, quality control etc.

Nobody wants to reinvent the wheel and looking for a flexible software that fits your use case is probably the place to start, if there's is nothing on the market that fits your needs the build option might be right for you.

Which is best for you?	Weighting 1-3
Building + Pro: Custom tailored features can be developed to match unique business processes. - Con: Continuous investment in a dedicated internal team for development, updates, and maintenance & can be hard to keep up with the market without significant investment.	1
Buying + Pro: Features normally serve a market and could solve the problems you are trying to fix. They have also already been tested across a wide number of users base and are battle hardened. - Con: Dependence on vendor's schedule and priorities for new features and improvements.	3

2. Budget & Cost Efficiency

If you’re weighing up whether to buy a solution or build your own, there’s no doubt that cost is one of your top concerns.

You must factor in the cost of the talent required to build the solution. Consider the salaries of the new employees or contractors you plan to hire for the project, or the existing employees who have been pulled onto the project. When building this includes paying for the initial buildout, ongoing support, bug fixes, code maintenance, upgrades, platform migrations, and keeping up with software industry trends. All of these costs can add up to hundreds of thousands of pounds (if not millions!).

It can be tempting to outsource to get extremely low rates but be careful when doing this. Software Developers are just like a master craftsman. Skills, tenure and talent is linked to the work they produce, that’s why the top software companies such as google, amazon etc. pay huge salaries for top talent! Skimping out can result in buggy, slow and unstable solutions that require constant fixing.

Finally, you have to consider opportunity costs. If you use internal resources to build and maintain your solution, you must pull these resources from other important projects and initiatives. Those projects and initiatives may be generating revenue for your company.

(a baker’s value is baking bread that’s where he earns his crust).

Which is best for you?	Weighting 1-3
Building + Pro: Building your own software eliminates the need for monthly subscription fees and allows for complete customisation and control over the product development lifecycle.  - Con: The initial and ongoing financial commitment for developing and maintaining custom software can be substantial, potentially accumulating to a significant expense over time.
Buying  + Pro: The SaaS model leverages economies of scale, allowing for lower operational costs due to shared infrastructure and centralised maintenance across a broad customer base.  - Con: Dependence on a SaaS provider limits control over the software, potentially impacting customisation and leading to challenges if the provider changes terms or discontinues service.

3. Time to Value

While considering the balance between custom development and purchasing an off-the-shelf solution.

On one hand, the allure of custom-built solutions lies in their precise alignment with specific business needs. The time to value may appear extended due to the development and integration phases. Yet, this time investment can lead to a more nuanced fit for your operations, potentially leading to greater long-term value. This pathway demands a strategic outlook, acknowledging that while the initial journey may be longer, the destination is a tailored fit potential returns.

Ready-made solutions often provide a more expedited path to operational value. The swift implementation allows businesses to harness new functionalities almost immediately, which is crucial in fast-paced markets or when responding to emergent challenges. This quick deployment can translate into a rapid return on investment and an earlier realisation of benefits, from improved productivity to enhanced customer satisfaction.

It's important to acknowledge that while custom solutions offer a high degree of specificity, the time and resources needed to achieve this can often be greater than anticipated. With a purchased solution, you're not only buying a product but also leveraging the vendor's expertise and ongoing support.

Which is best for you?	Weighting 1-3
Building + Pro: Building custom software allows for the creation of bespoke features perfectly suited to your business's unique processes, offering a tailored fit not typically available in off-the-shelf options. - Con: The time to value can be significantly longer due to the need for development, testing, and deployment before the software can be used effectively.
Buying + Pro: Purchasing a SaaS platform significantly accelerates your time to value, minimising your time investment to just selection and deployment, thus rapidly aligning your objectives with actionable solutions. - Con: The time to value may be reduced if the solution doesn’t fully meet specific business requirements, necessitating additional customisation or workarounds.

4. Adaptability and Future-proofing

When considering adaptability and future-proofing in the context of rapidly evolving technology.

Opting for a solution from established vendors means tapping into their expertise and resources dedicated to keeping the software up-to-date with the latest technological trends.

This approach not only ensures that your tools remain relevant but also offloads the responsibility of tracking and implementing new technologies, allowing your business to focus on its core operations.

While the agility to adapt to new technologies is somewhat dependent on the vendor's commitment, leading software providers are incentivised to maintain their market position by continuously updating their offerings.

Conversely, building custom software offers unparalleled adaptability to your immediate business needs and the flexibility to evolve. However, this route demands a proactive and resource-intensive approach to stay ahead of technological advancements, posing a significant challenge.

Which is best for you?	Weighting 1-3
Building + Pro: Custom software can be designed with future growth in mind, making it easier to adapt and update as new technologies emerge or as your business evolves. - Con: Predicting future technology trends is challenging, and there's a risk that custom-built software might need substantial rework to keep up with technological advancements or shifting market demands.
Buying + Pro: Established software vendors typically invest in keeping their software up-to-date with the latest technology trends, potentially future-proofing their product and, by extension, your investment. - Con: If the vendor doesn't update their offerings in line with new technologies, your software may become obsolete, and switching to a new system later can be disruptive.

5. Maintenance, Reliability and Support

Building a solution in-house isn’t a one-time event. You’ve got to consider who will be on the hook if an unexpected bug pops up or if more significant refactoring is required. In addition, someone must be on point for maintaining the solution and adding additional enhancements as needed. 

Again, this comes back to talent. If you don’t have the right people with the right skills to provide ongoing maintenance to your solution, you’ll be left scrambling to find them. Plus, if you do have the resources, you’ll have to pull them off other projects when your solution needs to be fixed, refactored, or enhanced. 

If you purchase a solution from a vendor, you don’t have to worry about ongoing maintenance as vendors are responsible for fixing any issues that might crop up. In fact, software providers regularly release new versions of their products that fix known issues.

Something that is often overlooked is documentation, training and support, this can make a huge difference in the success of the solution. Developing materials and providing ongoing support can easily consume as much, or more, resources than writing the original code.

Which is best for you?	Weighting 1-3
Building + Pro:  Building your own software grants you the autonomy to schedule updates and troubleshoot based on your business's immediate needs, providing an opportunity to react swiftly to issues as they arise. - Con: The Onus is on your business to ensure the software's reliability, which means you must invest in a capable IT team, architecture, & infrastructure. Any gaps in expertise or resources can lead to downtime and affect the stability of the software.
Buying + Pro : Benefit from the vendor's expertise and established infrastructure, which often translates to a more reliable platform with professional support and systematic updates. These services are backed by the vendor's reputation and experience. - Con : Dependent on vendor for updates, fixes and the hierarchy that they are completed.

6. Weighing it all up

There’s one last important step in your decision-making process: adding weight to your decision criteria. It’s likely that as you’ve considered each of the points in this worksheet, ‘Build’ wins in some areas while ‘Buy’ wins in others.

But not all criteria are of equal importance, and not all people will place the same amount of weight on each point. So, take a minute to consider not only the winner in each area, but also the amount of importance you would assign to each point. Then a simple tally should help you to the right conclusion!

7 Key Considerations Scoring Mark an ‘X’ for chosen ‘Build’ or ‘Buy’ and rank the importance 1-3	Buy	Build
1. Features	2	1
2. Budget & Cost Efficiency	X	X
3. Time to Value	X	X
4. Adaptability and Future-proofing	X	X
5. Maintenance, Reliability and Support	X	X
Tally each column for your results

It's very normal to face the ‘Build’ vs. ‘Buy’ decision when it comes to adding a system in place for your project delivery. We hope we have given you some insight and guidance in to how to make the correct decision for your company.

Those that choose the buy decision partner with Frame Solutions to drastically reduce time to market, shorten the ROI timeline, frees up internal resources, eliminates documentation and support concerns, and delivers a rich and scalable feature set.

Reach out today if you want to discuss further – Request Demo | Frame Solutions (frame-solutions.com)