Internal System or Best of Breed
Where an organisation has determined that Resource Scheduling and Skills Management is important enough to make it one of their core business applications – many have used their internal or contract development team to create a bespoke solution. While we get to see some incredible home-grown solutions there has been a long debate about whether an organisation should build software solutions using in-house IT resources (build) or buy market-ready products (buy).
When to Build
Core Competency – Larger companies choose to “build” software systems that are part of their core competencies. For example, banking systems are critical to every financial organisation and are mostly developed in-house. Where resource planning and skills management is part of this core competency – it is widely accepted that building an internal system is a pragmatic approach.
When to Buy
Specialist Functionality – Where an organisation is dependent upon effective resource planning and skills management and where internal systems built to support core competencies - such as banking, Insurance or Pharmaceutical, don’t provide adequate functionality – then a best of breed solution should be acquired. A good example of this is CRM, despite many systems having the capability to manage data, schedule tasks and to generate reports– most companies prefer to buy a best of breed, most often Salesforce.com or Microsoft Dynamics.
Other Factors to Consider
Time of Delivery - If both “buy” and “build” approaches can meet the delivery time requirement, then this factor is of lower priority. If the software delivery is time-sensitive, then we need to put more weight on this requirement. It is generally accepted that the off the shelf product can guarantee the delivery time.
Return on Investment - Organisations strive to achieve high returns on investments (ROI). Also, the ROI requirement usually determines the allocation of funding and resources. Generally, the “buy” approach has advantages in pricing, not only because the off the shelf products have wide user bases to lower unit costs, but also because software vendors are exploring a variety of modern pricing strategies – such as Perpetual, Subscription, Financed or even shared risk.
Support & Maintenance - We certainly wish that once the software is installed, then the less IT intervention the better. But things always change. Both the “buy” and “build” software need to install security patches, fix bugs, and/or add new features. A better way is having a service-level agreement (SLA) signed when acquiring an off the shelf product or before building an in-house application. The SLA permits all parties to understand their responsibilities involved with the use and maintenance of the software.
Total Cost of Ownership – It is worth looking at each of the factors above when deciding on your approach to buy versus build adding any specific to your business. Internal costs as well as development costs tend to escalate when requirements change or when projects extend beyond initial duration – buying pre-built functionality has significant benefits in this area.
Retain Software provides Market Leading Best of Breed Software for Resource Planning and Skills Management.