Buying vs. Building Software: A Decision-Maker's Guide

For many business leaders, a common question that is constantly asked is whether to develop custom software or buy an existing solution to fill your business’s needs.

These days, SaaS (Software as a Service) options are plentiful and convenient, but their costs can add up quickly. Alternatively, creating custom software can also require a significant investment of time, money, and resources.

This dilemma is similar to everyday decisions we all face. Should you cook at home, spending time and effort on meal preparation, or dine out for convenience? Do you fill out your tax forms yourself or hire an accountant to handle them? Both choices have their advantages and drawbacks.

To decide what's best for your team, it is crucial to weigh the pros and cons of building versus buying your next software solution. Our evaluation will help you determine which option aligns best with your specific requirements and objectives. 

Pros of Building Software

Customization

Custom software allows for tailored functionalities and features, ensuring that the end product will most closely match the intended purpose and user needs.

Competitive Advantage

Proprietary software can be a key asset in achieving strategic business goals such as productivity, customer experience, optimized operations and staying ahead in the market. It also becomes an asset of your company as a form of intellectual property (IP).

Integration with Existing Systems

Custom software can be designed to seamlessly interact with other tools and platforms already in use, reducing redundancy and enhancing overall efficiency.

Scalability

Unlike off-the-shelf solutions, which may have limitations, custom software can be designed to handle increasing workloads and expanding functionalities as your organization grows.

Security

You can prioritize security features and protocols, ensuring that sensitive data is protected according to their standards, which can be more stringent than those of generic software providers. This is particularly important within industries such as healthcare, financial services, and the public sector.

Cons of Building Software

Higher Initial Cost

Traditionally, the financial investment required can be a barrier, especially for small businesses or startups with limited budgets. However, new technologies and approaches to software development such as low-code and no-code development can significantly reduce the cost to build a custom solution.

Time Involved

The time taken to bring a brand new software product to market can be longer compared to adopting off-the-shelf solutions. Planning is required to ensure the deployment of the software is aligned to its employee-facing or customer-facing rollout.

Complexity and Risk

Issues such as scope creep, unexpected technical challenges, and changing requirements can lead to project overruns in terms of both time and budget. Managing these risks requires experienced project management and a flexible development approach.

Maintenance and Support

Ongoing maintenance such as fixing bugs, updating software to keep it compatible with new hardware and operating systems, and improving functionality based on user feedback are an investment you must plan on making. Ensuring continuous support can be resource-intensive and requires a dedicated team.

Dependence on Key Personnel

Building and maintaining custom software often relies heavily on a few key individuals who possess in-depth knowledge of the system. If these individuals leave your organization, it can create a knowledge gap and disrupt the continuity of support and development efforts.

Pros of Buying Software

Cost-Effective

Purchasing pre-built software typically requires a lower initial investment compared to developing custom software from scratch. This is especially beneficial for small businesses or startups with limited budgets.

Quick Deployment

Off-the-shelf software solutions are usually ready for immediate use, allowing for quick deployment. This enables businesses to start using the software almost instantly, minimizing downtime and accelerating the time to benefit from the new tool.

Reliability and Stability

Commercial software products are often well-tested and refined through multiple iterations and user feedback. This extensive testing process helps ensure that the software is reliable and stable, with fewer bugs and issues compared to custom-built solutions.

Regular Updates and Support

Updates can introduce new features, improve performance, and address security vulnerabilities. Professional support services can assist with troubleshooting and technical issues, ensuring smooth operation.

Comprehensive Documentation and Training

Most commercial software comes with comprehensive documentation, tutorials, and training resources. These materials can help users quickly understand and utilize the software effectively, reducing the learning curve and enhancing productivity.

Cons of Buying Software

Limited Customization

Off-the-shelf solutions are designed to cater to a broad audience, which means they may not fully align with the specific needs and workflows of an individual business. Customizing these solutions to fit unique requirements can be challenging or impossible, as well as costly.

Compatibility Issues

Compatibility issues can arise, leading to inefficiencies and the need for additional workarounds or third-party integration solutions, which can be costly and complex.

Subscription Costs

Over time, subscription fees can add up, potentially making the software more expensive in the long run compared to a one-time purchase or custom development.

Dependency on the Software Vendor

When buying software, businesses become dependent on the vendor for updates, support, and future developments. If the vendor discontinues the product, goes out of business, or fails to provide adequate support, it can leave users in a difficult position with limited options for recourse.

Security Concerns

Hackers often focus on popular software solutions, exploiting vulnerabilities that can affect a large number of users. Additionally, businesses must trust the vendor to handle their data securely, which can be a concern for some organizations.

Bridging the Gap with Low-Code/No-Code

Empowering Non-Technical Users

One of the most significant advantages of low-code/no-code platforms is their ability to empower non-technical users, also known as "citizen developers." These platforms use intuitive visual interfaces, drag-and-drop tools, and pre-built templates, allowing users with little to no programming knowledge to create applications. This democratization of software development:

• Increases Participation: Employees from various departments can develop custom solutions tailored to their specific needs.

• Enhances Responsiveness: Non-technical users can quickly address problems and innovate without waiting for IT department availability.

Bridging the IT Skills Gap

The demand for skilled software developers is higher than ever, leading to a significant skills gap. Low-code/no-code platforms help bridge this gap by:

• Lowering Barriers: Enabling more individuals to contribute to software development without requiring extensive coding skills.

• Expanding Talent Pools: Allowing organizations to leverage a broader range of talent, alleviating pressure on IT departments.

Accelerating Development Cycles

Speed and agility are crucial in today's fast-paced business environment. Low-code/no-code platforms significantly accelerate the development process by:

• Rapid Prototyping: Allowing quick creation and iteration of prototypes using visual development tools.

• Faster Deployment: Enabling rapid deployment of applications, reducing time to market, and helping businesses stay competitive.

Cost Efficiency

Developing software traditionally can be costly. Low-code/no-code platforms offer several cost-saving benefits:

• Lower Development Costs: Minimizing the need for specialized coding skills and extensive development resources.

• Reduced Maintenance Costs: Simplifying maintenance and updates with centralized control and user-friendly interfaces, which reduces ongoing costs.

Enhancing Innovation

Low-code/no-code platforms foster a culture of innovation by making it easier for a broader range of individuals to experiment with ideas:

• Encouraging Creativity: Allowing users to test and implement their ideas quickly, leading to innovative solutions.

• Fostering Experimentation: Providing a platform where iterative experimentation is straightforward and less risky.

Improving Collaboration

These platforms enhance collaboration between technical and non-technical teams by providing a common development environment:

• Unified Development: Facilitating better communication and cooperation, ensuring that business requirements are accurately translated into functional applications.

• Cross-Functional Teams: Promoting teamwork across different departments, leading to more comprehensive and well-rounded solutions.

Scalability and Flexibility

Low-code/no-code platforms are designed to scale with the business needs:

• Easy Scalability: Allowing applications to grow and evolve without extensive redevelopment.

• Adaptability: Enabling quick adjustments and updates to applications as business requirements change, ensuring long-term relevance and utility.

Enhanced Security and Compliance

Reputable low-code/no-code platforms prioritize security and compliance:

• Built-In Security Features: Offering robust security measures to protect data and ensure compliance with industry standards.

• Regular Updates: Ensuring that applications remain secure and up-to-date with the latest security patches and compliance requirements.

Our Recommendation

Conduct your due-diligence to consider existing software platforms and how they can meet your needs. Even as a software company, we often use existing platforms for some functions of our business.

Also assess what makes your organization unique and think about ways software can further differentiate your organization to its customers. You may find that a custom web or mobile app, automating a process, or enabling A.I. may be the better fit. We are proponents of low-code/no-code technologies because they support at least 80% of custom applications that most organizations need. Contact APG Emerging Tech so that we can help you through this decision-making journey.

- Simon Lensmire