Build vs Buy Software — Which Option Is For You?

There are many types of software applications out there that can meet your business requirements. If you find yourself in need of an app that provides a specific function, you have two options: you can either purchase existing software or build your own custom software.

The following guide explores the pros and cons of both, to help you determine which option will suit your needs best.

Should You Build Software?

To begin, let’s go over the pros and cons of building a software app in-house.

Advantages of Building Software

The following are the advantages of building your own software:

  • Ability to customize your software to your requirements: The software you build yourself is customizable to your specific needs. Features can be implemented, removed, or changed based on what will benefit you.

  • Capacity to scale your software to meet evolving needs: You can easily scale any software that you build to meet evolving software requirements. For example, if your business grows and you require more licenses or software features for your team.

  • Capability to integrate with existing systems more easily: The software you build can be designed to more easily integrate with your existing systems.

  • As such, you are less likely to experience issues when it comes time for software updates or changes, especially if your custom-built software is meant to enhance other tools that your company currently uses.

  • Gain a competitive advantage: Custom-built software can help your company gain a competitive advantage. While your competition is likely using software that's available on the market, you'll have a competitive edge due to having built a unique app that suits your specific needs.

Disadvantages of Building Software

While there are many advantages to creating your own software, there are a few drawbacks as well.

The following are some of the disadvantages of building your own software:

  • Developing software takes time: The actual software development process can take months to complete, depending on the complexity of the software. It's also worth noting that if you are hiring in-house developers to work on the project, it can take quite a while to find and hire the right team.

  • Building software is expensive: Hiring an in-house development team is going to be incredibly expensive, especially if they are full-time.

    There are also expenses for the equipment and software you'll need to build your own app. You could hire freelancers, but the quality of work may vary and they are not always reliable. Outsourcing is probably your best option, but even this will be expensive.

  • Long-term maintenance is required: Software requires ongoing maintenance. You'll need someone to fix bugs, add new features, and address possible security issues over the software's life cycle. Software requires maintenance over time, and this may be an ongoing expense.

Should You Buy Software?

Buying software may seem like the easiest choice. It's undoubtedly the most convenient option, however it's important that you understand both the advantages and disadvantages of doing so.

Advantages of Buying Software

The following are a few of the advantages of buying existing software:

  • Ability to deploy right away: Software that you purchase is ready to go as soon as the payment has been processed. If you need to address an immediate need and time is a factor, purchasing software is the best option as you can deploy it straight away.

  • Lower cost: Software that you purchase will be cheaper than software that you build yourself. Vendors usually offer a range of subscription models that include more affordable plans. Some software vendors will even offer discounts for buying multiple licenses at once.

  • Access to new features and updates: Software vendors are constantly coming up with new software features and updates, which means that you'll be able to access the most recent software features without needing to build them yourself.

  • No maintenance required: Software that you purchase doesn't require any additional software maintenance as this will likely be covered by the seller. This means you will not need to source additional IT resources to maintain the software.

Disadvantages of Buying Software

Despite the advantages, there are some disadvantages to buying software as well.

These include:

  • Paying for features you don't need: Software that you purchase is priced according to how many features it has. Software with fewer features will be cheaper, however this option might not be sufficient for what you need.

    Conversely, more advanced options may have everything you need, but you may end up paying for a plan that includes additional features that you'll never even use.

  • No control over future features: Purchased software is typically locked into the vendor's roadmap. If they decide not to introduce a feature you need or remove an existing feature that you use, then there isn't much you can do about it since software updates are at the vendor’s discretion.

  • Limited customization: While there are some customization options when it comes to choosing software plans, the vendor ultimately decides what features to provide. When you buy software, it will never be 100 percent customizable.

  • Locked into long-term contracts: When you buy software, it’s usually available through a subscription model with an initial contract term of at least one year. Even if the software doesn't meet your needs, you may be locked into a long-term contract. There are monthly plans available for some software packages, but these can cost more.

  • Integration could pose a challenge: Software that you purchase often needs to be integrated with your existing software or software platforms. If any of your current systems are older, then software integration could pose a challenge.

  • Costs can increase over time: Not only can subscription costs go up over time (especially when it comes time to renew), but you'll have to scale up as your company grows. You will need access to higher-tiered plans, whether it's because you need more licenses for your employees or because you need access to more features.

How Much Are You Willing To Spend?

The cost associated with both buying and building software depends on the function of the software required. If you need a specific function, there may be an app that provides the function you need at a small, one-time cost.

On the other hand, a simple app may cost more but will allow you to customize certain features based on your needs. Whether you buy or build software will be determined by how much you are willing to spend.

Some software apps on the market have extensive features and functionality. However, these programs are often very expensive. Moreover, software like this is typically only available on a monthly or yearly subscription, which means that the cost will be ongoing for as long as you need the software.

As such, it might seem like building the software is the more cost-effective option long term. However, it's essential to understand that there are considerable expenses.

Hiring full-time employees and investing in the tech needed to develop software will be costly. On top of that, you will also have to maintain the software, which means that there will be some long-term, ongoing costs associated with building your own software. It may come to a point where it is less expensive to buy ready-made software.

When it comes down to it, buying software is likely to be cheaper than building your own custom software. While there will be a significant up-front cost, you will be able to use the software immediately. However, if you have the funds available, building your own software has some significant benefits.

How Complex Are Your Requirements?

Choosing to build or buy your own software will also depend on how complex your requirements are. If you need basic functionality, then finding software that offers that specific function won't be difficult.

However, if the requirements you have for the software are very complex and specific, it might be a little more difficult to find existing software that can give you what you need.

Moreover, you may not be able to find software that meets your requirements, or you might find that you would need to purchase three or four different apps to get all the features you are looking for.

If you build your own software, you'll have total control over the features and functionality it provides, which means that it can meet your needs much more effectively.

Will You Require High Connectivity With Your Current Software Ecosystem?

The odds are that you have an existing ecosystem of software applications that your company already depends on. If you develop your own software, then you can customize it to ensure it integrates well with your current ecosystem.

Unfortunately, it's not always easy to find an existing software solution on the market that can connect with your existing ecosystem. This is something that you'll need to keep in mind while you do your research.

Maintenance Of The Software

Not a lot of maintenance is required if you simply buy the software you need. The app's existing programming team will provide regular updates to address maintenance (such as security upgrades or the addition of new features). All you will have to do is accept the updates.

Additionally, most software packages come with customer support, which means that if you have any issues, they will help address them. Any bugs that occur will be taken care of as general maintenance is rolled into the cost of the software.

If you build your own software, then you will be responsible for maintaining it. You'll need someone permanently available to keep your software updated and make sure that any issues that come up are addressed.

As such, software maintenance is much more time-consuming and costly when you build the software compared to when you buy it.

The Solution You Are Looking For

Comparing the pros and cons of buying versus building software can help you determine what best suits your needs. But knowing the solution for a few common business scenarios can further help your decision.

With that in mind, the following are a few solutions you may be looking for when deciding to build versus buy software for your business:

  • Sales: Sales teams have very specific needs when it comes to software solutions. While there are apps that provide much of what a sales team might need, building your software in-house means that your development team can get direct input from your sales team to ensure that your software addresses every need they have.

    As such, building your software in-house can lead to your sales team becoming more efficient and more effective.

  • Content Management System: Building your own Content Management System (CMS) will take a lot of time. Moreover, there are already many high-quality CMS products available on the market.

    Although you may want a high level of customizability when it comes to your website, there are so many plugins and other personalization options available with software already on the market.

    If you are a small or mid-sized business, purchasing an existing CMS probably makes more sense. Larger businesses may have room in the budget to build their own CMS software.

  • Collecting, processing, and analyzing proprietary data: Collecting and analyzing your company data is critical to improving your marketing and sales efforts. As such, you should strongly consider building your own software solution.

    Doing so will allow you to customize how your data is organized, how it's analyzed, and will make it easier to integrate it all with your existing data resources.

  • E-Commerce solution: Whether you buy or build an e-commerce solution depends on how much time you have.

    If you're hoping to get your e-commerce page off the ground soon to meet the demand of an upcoming holiday or season, you might want to opt for an existing solution.

    If you have some time on your hands and you're planning to offer an extensive catalog of products, then you could consider building your own e-commerce solution.

Choosing To Build Versus Buy Software Needs Careful Consideration

There's a lot to consider when it comes to figuring out whether to buy or build your software. In a perfect world with unlimited time and money, building your own custom software would be the way to go. But unfortunately it's not a perfect world, and the truth is that there are thousands of software applications on the market that will likely meet your needs.

When it comes down to it, buy what you can and build what you have to. The odds are that there will be something out there that will suit your needs. However, once in a while, you may find that isn't the case. When specific customization is required, then building your own software will likely be your best option.

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