Business Strategy

Should your company buy or build new software?

Small and medium businesses often face the challenge of whether to buy pre-existing software for their needs or develop their own custom solutions. Both have the potential to take up a hefty chunk of the budget, which means making the wrong decision here can be costly. Here are the important things you need to consider when choosing between an off-the-shelf solution and a custom one.

Who will use this software?

There are two major audiences for software: your employees and your customers. Because their relationship with you is immensely different, the criteria for choosing a software solution should be immensely different.

If your business isn’t enterprise-level, sometimes the sheer cost of developing custom software for internal use is out of reach for the smaller businesses that will have limited internal users. Always compare it to the monthly costs of software-as-a-service (SaaS) off-the-shelf solutions, though. Even a monthly cost of $20 per user can add up rapidly if every employee needs access to the software. If you need extensive add-on features to an existing solution that drive up each user’s monthly cost, it may end up being cheaper to simply build custom.

As soon as your software needs to be seen by your clients, it must meet a much higher design and ease-of-use standard. Employees can be trained, but if customers can’t figure it out on their own quickly, they may switch to a competitor. Unless an off-the-shelf solution fits your needs beautifully, anything that is customer-facing is a worthwhile investment in custom development. It should also be high-quality custom development. This is not a place to cut costs and simply choose the lowest bidder. Sacrificing quality for customer-facing software means you’re willing to sacrifice customers, too.

What is the main purpose of this software?

Choosing software for your employees should be driven by improving efficiency of your company. Excessive training time or a cumbersome interface lowers the chances that your new internal software solution will actually improve efficiency. If your new software solution is going to address issues common in your industry or business as a whole, like managing payroll or tracking sales leads, there are likely existing services that will fit your needs beautifully. There’s no reason to recreate QuickBooks or Salesforce as a custom project if what they’re offering already fits.

If your new internal software solution is for something very distinctly unique to your business, such as managing the nutritional value and quantity of dog treats consumed by each of your office dogs, you may be a better candidate for a custom-developed solution. It all comes down to finding the tipping point between common business needs and individual needs.

The same types of decisions apply to software for your customers. A basic business need, like processing credit cards, can be met perfectly by solutions like Square. Reinventing the wheel would be a massive waste of resources. A need very unique to your business, such as coordinating a service your company provides to the client, will likely require some custom development work to make sure the app is branded for your business and easy for both you and your customers to use as intended.

What devices will people be using when they interact with the software?

Before making any decisions about software, you need to know what hardware your users are using to access an app. Are your employees mainly using this at their desks, on their computers? Do you have a team out in the field and they all carry company-issued Android phones? Will your customers interact with your brand through this app on their smartphones or tablets – and do you have any idea what kind of devices they use?

There may be a great solution out there already to meet your needs, but if it only works on iOS and your team carries Android tablets, it’s not going to work. There may also be a great web app out there to help you interact with your customers, but if they’re going to use the app again and again on a smartphone, they might they lose interest if they have to type in a web address every time and start the process from the beginning.

Custom development will be the best option if the available software you need won’t run on the hardware available.

How much can you spend on the software?

While this should never be the only factor in your decision, it’s important to take into account. Working on an extremely limited budget may force you to limit your feature set by either choosing to adopt an existing solution that doesn’t quite meet all of your needs, or developing a custom app with the minimum feature set that makes it worth the investment. Prepare to make sacrifices either way if your limited budget has no wiggle room in it.

On the opposite end of the spectrum, just because you have seemingly unlimited funds doesn’t mean you should rush to custom develop. Use the deciding factors above to determine whether or not custom development is a wise use of your resources.

Always consult a professional.

Even if you have an internal team of developers, getting an objective outsider’s perspective is invaluable. Talk to an expert in software about whether your needs can be met with pre-existing software or if a custom application is right for you. There may be features that you’ve overlooked or over-prioritized, and an outsider’s opinion can help you see those clearly. We’re available to chat if you’re considering a new software solution for your business. We can help you make decisions that will drive bottom line results in your company.

By Emily Hart