Buy vs Build: How To Know When You Need Custom Software Development

Finding the balance between fulfilling short-term needs, and planning for long-term growth, is crucial to business success.

There's nothing wrong with businesses starting out with affordable, off-the-shelf software that gets the job done. Unfortunately, this kind of software isn't customizable, and holds your business back from scaling to the next level. Nobody wants to spend more than they have to on software, which is why it's often a last-minute emergency when you realize that it's really time to upgrade to something better.

To make an informed software decision that has long-lasting results, business leaders needs to evaluate their current needs, alongside future expectations.

Step 1: Evaluate Your Current Software

Before you jump into building your own software, or purchasing a new off-the-shelf solution, learn what you love about your current software, and what it's missing.

Make a list of what you currently need your software to be doing, and look back on some the tasks it's not performing well. A good indicator is measuring how much time each task takes, and the value that task brings to your business. If the process is too manual, you might need to look at software that automates the tasks for you.

If the list of missing features is longer than the features meeting your needs then it's time for you to look at upgrading to a custom or off-the-shelf solution.

Step 2: Consider Your Budget

The size of your company, and the budget you have dedicated to technology, can be a determining factor in your selection between buying or building a solution. Most small businesses don't have the resources to build a solution, so getting something pre-made at a subscription level is more likely to suit your needs even if the software itself has its limitations.

Step 3: Buy vs Build - Compare Your Software Options

Building your own custom software, whether internally or with an outsourced team, can add tremendous value to your company.

When you should build custom software

  • Flexibility: Companies who have specialized needs that can't be solved by any one pre-made solution.
  • Rapid Growth: If your business is quickly expanding you don't want to be continuously searching for new software solutions. By building custom software you can add in features that allow for growth, and scalability.
  • Ownership value: Owning the intellectual property (IP) to your software adds  financial value to your company. (This is especially good for startups trying to get a higher valuation for funding rounds.)
  • Compatibility: Large organizations rely on different systems to manage certain tasks. Those tasks often need to communicate with each other, so it's important that the software can support processes you already have in place. With custom built software, you can ensure that communication between software is seamless.
  • Efficiency: Consolidate several tools into one custom-built software solution that does everything you need in one place. This will improve productivity, and reduce inefficiencies.
  • Innovation: Technology companies need to protect their assets, particularly if what they are building is unique to their industry.

When you should buy an out-of-the-box solution instead

Sometimes custom software isn't the solution your business needs right now.

  • Time: Custom software takes time, and resources; It can take anywhere between a couple weeks to months to make custom-made software.
  • Budget: Whether you're looking to use an internal team or outsource your project it's likely to cost more upfront than a pre-made solution.
  • Unnecessary: There's no need to reinvent the wheel. If your business needs something that you can get 100% from a pre-built solution, it's probably better to go with that solution instead.

Step 4: Choose Your Solution

If building, you will need to make a choice for who they key stakeholders will be and the plan they will follow to create the custom software.  There's a couple of choices for creating custom software:

  1. Internal tech team: Tap into your own resources to build the software your company needs to scale successfully.
  2. Hire a contractor: This could be an individual who can take on a small(ish) project, and act as a supplement to your team if you can't afford to take them off other work.
  3. Hire a software consulting company: Get expert advice, plans, and have an experienced team of engineers build the custom software that meets your business needs.

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