Build v Buy

A common dilemma in business software purchases…

The majority of companies have to make key decisions about software purchases and when faced with a requirement for something fairly specialised many companies seriously consider writing their own software.  The more specialised the application, the more likely is a decision in favour of internal software development.  It is common for this decision to be made when looking at database sampling and panel management for the purposes of market research.

When making this decision it is easy to compare an apparently high up-front cost of buying a system and customising it to your specific needs; with the nil up-front cost of building your own.  Then, all of a sudden, building a system internally looks attractive.  But it is important that a decision like this is taken with a full understanding of the hidden costs and potential problems involved in a large-scale internal development project. 

The following are important factors to take into consideration:

1. Does your company have the resources to plan and carry through a major project without distracting the company from its core business?  This is a major build project and could take 6-9 months to get even the core functionality in place.

2. Have you got the internal structures and organisation to make sure the project gets finished on time and within budget.  Many of these internal-build projects suffer from never being quite finished, and unless there is an “internal client” relationship set up within the company it will be difficult for the users to push for completion.

3. Can you support the software adequately after it is implemented?  Most software vendors operate some kind of help desk, and an internal project should be no different.  Not having an effective help-desk will impact on the usability of the system.

4. Who is going to document the software properly? Without documentation the company remains hostage to key members of the development team, and if they move away the company will loose the ability to further develop the software.

5. How is it going to be kept up to date?  Software vendors will expect to release new versions several times a year with major releases possibly once in every 2 years.  Without these updates the product will fall behind in technology and platform compatibility and eventually become redundant.  The cost of keeping it up to date must be factored in to the original build decision.  If nothing is done to keep it up to date, the expected life-time of the product is usually no more than 3 years.

6. A bought-in product will have had many man-years of development time put into it, and time and effort spent on a user-friendly front-end.  It takes time and effort to develop a product of a standard sufficient to satisfy the average user.  Users today are familiar with slick software packages and are not always tolerant of anything less than professional.

7. Calculate the opportunity cost of having the software installed and available to use immediately, against the wait of half a year or more before the internal system is ready.  What opportunities might you miss for selling a new service to your clients in that time?

When hidden time issues, management capabilities and costing are all taken into account, the result can be a sensible commercial decision to buy a software package from a specialist provider; whereas the argument for building your own system can be a route to distraction and huge hidden cost.  All too often, internal build decisions result in buying software some months later when the internal project has failed.

If commercially available products do not appear to exactly fit your requirements it is always worth looking into the possibilities of customisation.  Software built on modern platforms is much quicker to customise than has been the case in the past and many providers are happy to consider requests in order to make their product more widely applicable.

So THINK and PLAN before you decide to build you own…

For further information about sampling and panel management systems please contact Nicky Forsyth on +44 (0)1306 621062 or email nicky.forsyth@marsc.com or visit our web site at www.marsc.com.