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Build or Buy Software: The Ultimate Guide to Decipher the Nuances!

SOFTWARE DEVELOPMENT

build or buy software

Table of Contents

Came across a fork in the road of your software development journey? A point that made you question whether to build or buy software solutions for optimizing your business operations. No problemo! Here’s a detailed guide covering all the nuances between the two software implementation methods to help you make an informed decision.

 

“Should I build or buy software solutions for my business operations?” - This question has been a major head-scratcher for almost every entrepreneur with a growing business lately. However, the answer to this seemingly simple decision isn’t a ‘coin-toss & choose’ kind. Especially when we hear Harvard Business Review talk about how 1 out of 6 companies have to suffer from a 200% cost overrun and a 70% schedule overrun while building a custom software for their business. The initial response for most people after coming across this information would be to buy a software solution without any extra thought. But then, we have to factor in that the versatile needs of a business are not covered entirely by a single off-the-shelf(OTS) solution in almost every case.

So which path to choose in this situation? We can either compromise with the feature set, implement multiple ready-made software solutions and try to cycle between them effectively, or we can develop a custom software solution while bearing the risk of unwanted costs and a delayed development timeline. But wait! There are multiple workarounds to avoid these scenarios and develop solutions that include all your requirements without going overboard with the budget! But before we dive into that, let’s quickly discuss the core differences between the two methods.

 

Want to Build a Software?

 

Build Or Buy Software: The High-Level Nuances

Considering these two methods of integrating software into your business are significantly different from one another, it is best to lay the proper groundwork for both of them, assisting us to compare them effectively throughout the blog.

The most significant upside of building custom software is the flexibility it provides the stakeholders while deciding the exact features and logical flow they wish to integrate into their software solution. Whereas, in situations where your business needs an instant solution for a specific business vertical without getting into the hassle of developing and upgrading solutions, you can opt for an OTS solution.

While both the implementation methods have their own use cases where they outperform each other, your choice should be focused on the fact that which of the two aligns with the long-term goals of your business specifically.

 

Pros & Cons

Build Vs Buy Software: Pros and Cons

It’s time to take an in-depth look into the advantages and disadvantages that the two different methods have to offer. Try aligning them with your business objectives, it will help you figure out the better approach for your objectives efficiently 

 

Pros and Cons of Building a Software

A solution built from the ground up while focusing on your business needs specifically offers a plethora of short and long-term advantages for your business optimization, simultaneously there are a few factors that you need to keep in mind while building the solution as well. Let’s discuss the points in detail - 

Pros:

Flexibility

(1) Flexibility With Project Scope

While building a custom software solution you have the independence to ask your developers to include only the features that you feel necessary for your solution without the need of including any generic features. Additionally, with development models like agile, you have the ability to make changes to the software throughout the development cycle. This is especially beneficial when you want your application to be up-to-date with the upcoming trends.

Seamless Integration

(2) Seamless Integration

Wouldn’t you love it if a software solution would effortlessly merge with your pre-existing solution in absolutely no time, that’s exactly what you get to experience when building software solutions from scratch. However, it is not just for integration with the pre-existing software, having this approach from the get-go helps your business big time in the future as well, for example - by helping you to integrate additional modules without any issues.

Competitive Advantage

(3) Competitive Advantage

Two aspects to look at this - firstly, with the flexibility you have during the development, you can analyze the market to find gaps in the services other businesses are offering. Using these insights you can develop and integrate those services within your solution to stand out from your competitors. Or secondly, you can launch your product in the market as a Minimum Viable Product (MVP) before anyone else by focusing exclusively on the core functionality and the necessary features.

Ownership

(4) Ownership and Control 

Two aspects to look at this - firstly, with the flexibility you have during the development, you can analyze the market to find gaps in the services other businesses are offering. Using these insights you can develop and integrate those services within your solution to stand out from your competitors. Or secondly, you can launch your product in the market as a Minimum Viable Product (MVP) before anyone else by focusing exclusively on the core functionality and the necessary features.

Cons:

Development and Maintenance

(1) Development and Maintenance Cost

Well, obviously developing a software solution from scratch instead of just owning an instance of the main software will be expensive. You have to factor in all the resources you have to spend on developing that solution, from hiring the development team to investing hours to develop the entire solution and then fixing any errors that may arise. Even after the development phase, you have to spend extra resources to maintain the solution or to implement any new feature and functionality to the solution.

Collaborative Limitations

(2) Collaborative Limitations

This is an avoidable one, however, if you prefer building software solutions after hiring and assembling a group of in-house developers, you might be setting yourself up for a journey on the pain train. Developing a software solution requires a significant amount of experience and collaboration, without a harmonic environment within the development team your solution might have more operational errors than features. This level of collaboration is something only a group of seasoned professionals can offer. Wanna get in touch with the best ones we know?

 

Contact Seasoned Software Developers

 

Pros and Cons of Buying a Software

The typical scenario where buying an off-the-shelf solution makes sense is when your business doesn’t have a unique requirement at all and all it needs is a simple automation boost. The pre-packaged solutions are focused on solving a single business aspect rather than the whole business altogether. Let’s take a quick peek at the yays and nays of this approach -

Pros:

Cost Effective

(1) Cost Effective

Buying software in this cloud computing era means leasing the application on a subscription basis. This saves your business the upfront costs of developing and maintaining the solution that you would be paying if you chose to build your own software. Another advantage of this approach is that you can pay for using the application only for the timeframe your business needs it. In case, you no longer need the services, you can simply terminate your subscription plan with no strings attached, this cannot be the case with software you built for your own business as you will be owning most of the infrastructure yourself.  

Reliability

(2) Reliability of The Product

Now considering the fact that you did your research before buying a packaged software solution and did not just grab the first thing you came across, it is pretty safe to say that the application you bought will be stable and error-free. A few things to keep in mind while buying solutions for a field you’re not an expert in would be to keep the feedback and rating that the genuine customers have for the service provider in account while making the final call. Typically reaching out to discussion forums for this is better than looking into the service provider’s website as they can easily filter out to showcase only the positive reviews for their business.

Automated Maintenance and Upgrades

(3) Automated Maintenance and Upgrades

If sailing and staying on top of the trend wave every time a new technology disrupts the market isn’t your thing, then buying a software solution is a more reasonable choice for your business. Even though you struggle to gain any competitive advantage as you get almost all the trending features with everyone else using the solution. But hey! At least you did not have to go through an entire development cycle starting from research all the way to developing & testing, right? 

Cons:

Lack of Control

(1) Lack of Control

One of the major turn-offs while buying off-the-shelf software solutions is the limited customization power you have. Mainly because these solutions are built with the intention of providing the users with just an interface to work with while keeping the code and the remaining infrastructure hidden. Since these solutions are built to cater to as many users as possible instead of being focused on serving the needs of a specific market niche, the features offered here are noticeably generic. Additionally, if you have a business-specific privacy requirement or there’s a bug interrupting your day-to-day operations, you cannot do anything to fix it yourself, instead, you’ll most likely end up waiting for the next patch update, in the hopes that it gets fixed. 

Integration Issues

(2) Integration Issues

These two facts that every business has its unique way of operating and the OTS software solutions available in the market are built to serve the general public, do not get along very well. The common hiccups you will most likely encounter would be data inconsistency or operational bottlenecks. In order to work around these issues you might have to harness custom software solutions which kinda beats the purpose of buying software solutions in the first place.

No Additional Features

(3) No Additional Features

It’s no breaking news that companies selling pre-built solutions will obviously prioritize maximizing their profits first, and then serving their customers. How does this affect your business? Think of it this way - when you buy a software solution it contains all the latest features the market has to offer at that time period. However, the trending technologies are never static for the market and every now and then, there is a drastic shift in the trends and features that the market has to offer. But more so that often, the service providers pay gate for every significant upgrade, asking you to pay up if you want to harness a new attribute in your software.

No Additional Features

(4) Recurring Costs

With technologies like cloud computing becoming mainstream, you most likely have to pay for the software instances on an annual licensing or subscription-based model. Meaning you will be paying a recurring fee for using the solution, which is not the case when you build software. Now, when you stretch the usage of this solution for a longer period, let's say around a decade or so, and factor in all the costs for both methods, building software might still come out as expensive, but it might not be a major difference this time compared to the initial phase. You can think this through and self-evaluate whether the delta in cost after this period is worth giving up the competitive edge you would be getting otherwise.

 

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deciding factors

Factors That Help You Decide Whether to Build or Buy Software

It’s time to discuss a few important parameters that might help you reinforce your build vs buy strategy. What you gotta do is prioritize which of the factors listed below hold more weight for your business needs than the other, and you will have your method of choice by the end of it.

 

Nature of The Problem

(a)  Nature of The Problem You Are Dealing With

By evaluating the complexity and exclusiveness of your business problem you can make a choice whether to build or buy software solutions for your business. The general rule of thumb goes something like this -

  1. If the problem at hand is disrupting a single aspect of your business and has a commercial off-the-shelf(COTS) solution already available in the market, you should go for buying the solution.
  2. However, if your business bottleneck is affecting multiple operational sectors and is somewhat exclusive to your organization, then you should lean towards building your custom software solution.
Resources

(b) Resources Your Are Willing to Spend For The Solution

A few points to keep in mind here, one is the budget you have for your business, and the next is how quickly you wish to deploy the solution. Here’s how you can pick the best course of action in every possible scenario - 

  1. If you are low on a budget then buying packaged software is gonna be your only choice.
  2. If you have a decent budget then building software solutions that align with your business needs is definitely gonna be the superior option.
  3. If your need for the solution is already past the deadline then you should simply buy a software solution.
  4. If your business can sail a few more months in the absence of a solution without wreaking havoc, then building software is a better choice.
Integration

(c) Potential Integration Bottlenecks

In case you have a pre-existing software solution and you enhance its capabilities by developing a software solution that can integrate and work collaboratively with it, then your build vs buy strategy is significantly simplified. Here’s how - if you have a software solution already up and running, in almost every scenario, it is preferred to build your own software solution as you can follow the API first approach to ensure seamless integration between your legacy and modern solutions.

In case you don’t have an infrastructure in place already, then both building and buying a solution makes sense, however, if you choose to build a solution in this situation instead of buying one, it will help you in the long run. Because stacking new solutions on top of the ones you have already built is always easier than trying to make two different OTS solutions work together. The only case where the integration will be completely seamless in the case of an OTS solution is if you choose to purchase your solutions from the same service provider. But then again you don’t wanna fall into the vendor lock-in pit. 

Competitive Edge

(d) Competitive Edge Priority For The Business

It is kinda obvious that when you buy packaged software from a service provider, they will be selling the exact same instance to other businesses as well. Meaning many of your competitors might be leveraging the same application for their business needs on a regular basis. Not to forget, as they are developed with the intention to serve multiple markets at once, the feature set these solutions carry are mostly generic.

Alternatively, when you build software you can customize it based on your company’s preferences and the requirements of the customers in your market specifically, giving you an upper hand over the generic solution users by default.

Time Frame

(e) The Time Frame Planned For the Application Of the Solution

This point ripple effect to the first point we discussed in this section. When you’re conflicted between the choice of whether to build or buy a software solution, one of the better questions to ask yourself is - “How long is my business going to use this solution?”. Depending on the analysis of this question your choice of implementation can go either way. For example -

  1. If you’re planning to use the software solution for a business objective that is not gonna extend the timespan of a few years, then investing tens of thousands of dollars on building a software solution doesn’t make sense.
  2. However, if you know the business will be extensively using the solution for a decent amount of time. Or it will be supporting one of the core operations of your business for the entire time your business will be operational, then investing that amount to build a solution that is tailor-made for your business sounds like the better option.
Opportunity

(f) Opportunity Cost While Choosing One Over The Other

The typical thought process around software development and integration is that - building software solutions from scratch leads to high opportunity costs. And the cost is significantly lower in case you buy a software solution as they are ready to go straight out of the box. It is often pointed out that the resources spent on developing a software solution can be otherwise spent on other more important aspects of the business. However, this logic certainly has a few gaps that need to be addressed.

First and foremost, software development sets a business en route to automation, meaning efficient workflow and a plethora of additional benefits, which means it is just as important as any other business operation. However, if you still feel there are certain aspects that need the immediate attention of your in-house team, you can always outsource software development from someone who has been working on it for over a decade. Someone like - BinaryFolks’ custom software development team. This drops the opportunity costs of your business almost entirely and you don’t have to compromise on the capabilities of your solution either.

Control Vs Responsibility

(g) The Control Vs Responsibility Factor

This is a rather simple choice, depending on the nature of your business and the exact requirements of the solution both alternatives can be a feasible choice for your business -

Building your application from scratch gives you absolute control over the functionality as well as the features that go into the solution. However, since you are developing the solution its scheduled maintenance, updates and all the bug fixes are your responsibility as well.

Now, if that sounds too much for you, the easy way could be to buy a cloud computing-based solution where the service provider handles the maintenance, updates, and error correction themselves. But, the trade-off is that you do not have any control over the inner workings of the application, any significant change that you want to make will have to go through the service providers, which is typically not a speedy procedure.

Data Security

(h) Data Security Based On The Confidentiality Of Your Data

While operating with sensitive business data online, it is always important to make sure that it is stored and used in a secure way. Now building software allows you to keep your business data to your own servers, where no one else has access to it. However, as most service providers use the multi-tenant architecture you will be sharing your server with other businesses that avail the solution. On top of that, the service providers will have complete access to your data as they have complete control over the servers. Now, you may argue that data encryption protocols are always in place to protect every business’ personal data, but more so than often these shared servers are a preferred target of cyber criminals.

Another angle of concern can be the other businesses you share the server with, if one of the other tenants is careless while using the services and is attacked externally, it leaves all the businesses on the server in a vulnerable state, including yours.

 

What Makes BinaryFolks Your Go-To Choice For Your Software Development Project

Now that you’re a borderline expert in this matter and have a preference set factually at this point (you’re welcome), how about you let us know what it is! Also, in case you have decided that building a software solution is gonna do your business justice, let us take you to a quick tour of what to expect if you partner with BinaryFolks in this software development journey - 

High-Quality Custom Software

(1) Build High-Quality Custom Software Solutions with BinaryFolks’ Team of Experts

Our software development team is well-versed in developing custom software products that are built while keeping your exact business architecture in mind. We do not focus on attracting our clients by promising them unrealistically low project quotes, only to inflate them as the project progresses. Instead, we evaluate the entire project goals at the very beginning and fix the quote for the entire project from the very beginning. Our primary focus is on the quality of the software we deliver, something that has helped us to maintain a near-perfect record of 94% returning customers.

Cutting Edge Technologies

(2) Leverage Cutting Edge Technologies and Build Software Solutions That Perfectly Align With Your Business Goals

Our software development team doesn’t believe in showboating with the most trending tech stack in front of the clients without really understanding their requirements, literally, anyone can do that. What we prefer is to sit down with our clients and extract all the details they can provide us about the project. With this information in hand, we start curating the perfect technology stack for your project requirement and use it for the development cycle.

Complimentary Consultation

(3) Get Complimentary Consultation To Help You Fill The Gaps(If Any) in Your Project Scope.

Want your software development plan to be as flawless as it gets, good thinking! However, it’s easier said than done, especially if it’s your first rodeo in the field. But don’t worry, there’s an easy solution for you. Connect with our software consultants with hands-on experience in assisting business partners to sketch their business idea to life. We make sure your solution strikes a perfect balance between your unique requirements and the industry protocols to make the perfect application for your business needs.

 

Conclusion

In this blog, we thoroughly discussed all the details revolving around the discussion of- “whether to build or buy software solutions” for your business. Followed by addressing the pros and cons of choosing either software integrating methods for your business. We also mentioned multiple factors based on which we evaluated the feasibility of buying and building software solutions in those situations. Now all that’s left is for you to take the first step of reaching out and discussing your project requirements, we’ll handle the rest! So, what’s it gonna be - A zoom meeting? A call? A CTA Message? Your call honestly.

 

Talk to Our Software Experts!

 

FAQs

Is it better to buy software or build your own?

Depending on your business requirements, both methods can be a viable choice. Simply put, if your business is looking for a quick solution to a specific business aspect that is not particularly complicated and most likely has a solution already available in the market then buying a software solution should be the ideal choice. However, if your business needs to solve a complex issue that is most likely exclusive to your business case then building a solution by hiring a software development company should be a better option.

What is the major disadvantage of building software?

The primary disadvantage of building software from scratch is that it can cost a significantly higher amount than buying a readymade software solution. So, the time required to build a solution from scratch along with its testing and deployment can take up to several months.

What is the advantage of buying a software?

There are several advantages of buying a software solution if your business needs are simple and have a solution readily available in the market. Here are the top 3 benefits of choosing this approach -

  1. Cost-effective as you only have to pay the licensing or subscription fees.
  2. Time-saving alternative to developing your own software solution.
  3. No hassle of maintenance or upgrading; the service providers handle that aspect.
How long does it take to build a software from scratch?

Depending on the complexity of the software solutions including the feature integration list and the core functionality, the time required to develop the software can vary by a significant time frame. However, if we factor in the average time of software development projects in general, the time required can be categorized into 3 classes -

  1. Simple Projects - these projects take somewhere between 3-5 months.
  2. Medium or Semi Complex Projects - these projects take around 6-12 months on average.
  3. Complex Or Large Projects - these projects take 1+ years but can push to multiple years depending on the project scope.
Why should companies build software when it is cheaper to buy one?

The primary reasons can be the customizability that building your own software provides, something off-the-shelf solutions often lack. Moreover, the quality of the solution can significantly vary depending on your service providers. You can receive a much more effective solution compared to packaged software if you choose the right software development company.

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