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Your organization
realizes that it has some business challenges that need to be
resolved. You know that the perfect software application would
be the perfect solution, but where do you go from there? The
answer is not always clear. Like with most business challenges,
some meaningful analysis is required to make an informed
choice. Before committing to a course of action, an
organization should review available options and then decide on
the solution that adds the most value.
Since every organization
is unique, the best course of action for one company might not
be the best course of action for another. Your analysis should
identify the optimal solution for your organization and business
challenge. The first fork in the road is to decide whether to
build or to buy the perfect software application. Even if you
do not have access to developers within your organization, you
still need to perform a build versus buy analysis because your
optimal solution might be to outsource the building of the
software to a third party software developer such as Insidus.
Commercial off-the-shelf
(COTS) software is created by independent software vendors (ISV)
and is generally geared towards a wide audience. A good example
of COTS software would be a customer relationship management
(CRM) package. Many businesses have a large number of customer
relationships that they must track over time and across various
departments, so CRM packages are designed to be used by many
businesses across numerous industries. ISVs recover their
development costs by marketing their software to many customers
who could benefit from their product. This becomes a win/win
situation because the customer receives an affordable and robust
software package and the ISV does not have to reinvent the wheel
for every customer. As a general rule of thumb, the more
generic your business challenge is, the more likely you are to
find a COTS-based solution, but if your challenge is quite
unique, odds are there will be no COTS software solution
available
on the market. As a matter of economics, an ISV will not
develop a software application for a narrow audience or use. So
what is your alternative? Develop or outsource to develop the
perfect monolithic software application for your unique business
challenge.
Even after performing a
cost/benefit analysis for a fairly generic business challenge,
you may discover that developing your own unique software
solution would be more beneficial than licensing or purchasing
COTS software. If you decide that developing far outweighs
buying, then you must next decide if it is better to develop
in-house or to contract a third party software developer like
Insidus.
The decision on how best
to proceed is both an important and complex first step.
Without performing the build versus buy analysis, you will lack
the level of comfort needed to proceed. The proper
analysis up front can be an eye-opener and save you an
incredible amount of money, so do not avoid the analysis.
We have prepared a white paper detailing the pros and cons of
the build versus buy analysis. Click on the link to the
left to download our Buy or Build white paper and visit our
Financial
Analysis page to download our Calculating Return on
Investment whitepaper.
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