Build or buy: when custom software is worth it

Start with the process, not the software

Before comparing products or quotes, describe the process in plain words: who does what, in what order, with what information, and where it goes wrong today. Then ask one question about it. Is this something every company in your industry does in much the same way, or is the way you do it part of why customers choose you?

Accounting, payroll and email are the same everywhere. How you quote, schedule, dispatch or serve customers may not be.

The case for buying

• It is faster. A product that exists can be in use within weeks.
• The vendor carries the maintenance, the security updates and the new features.
• The cost is known in advance.
• It has been tested by many other companies before you.

For a standard process, these advantages are hard to beat, and building your own version rarely makes sense.

The hidden costs of buying

• Workarounds. When the product does not fit, your team adapts to it, with spreadsheets on the side and steps done by hand.
• Per-seat pricing. A price that looks small for ten people is a different number at a hundred.
• Tools that do not talk to each other. Three good products can still mean typing the same data three times.
• Limits on change. You can configure a product, but you cannot make it do something its makers did not plan for.
• Your data in someone else's system. Getting it out, in a useful form, is not always easy.

The case for building

• It fits the process as you actually run it, including the parts that make you better than competitors.
• You own the code and the data.
• There is no per-seat fee, so the cost does not climb with every hire.
• It connects to exactly the systems you already have.

When the process is central to how you win business, software that fits it precisely can be a lasting advantage.

The hidden costs of building

• The cost comes first, before any benefit.
• You own the maintenance. Software needs updates, fixes and someone responsible for it for as long as it runs.
• It needs a clear owner inside the business who can decide what it should do.
• If the process is not well understood yet, you risk building the wrong thing well.

The middle path

Most good answers are a mix. Buy the standard core, such as accounting or a customer database. Build the part that is unique to you, and build the connections that let the systems share data without anyone retyping it.

This keeps the amount of custom software small, which keeps the cost of owning it small, while removing the workarounds that cost you time every day.

Five questions to ask

• Is this process a reason customers choose us, or simply something we have to do?
• How much time does the team spend working around the current tools each week?
• What will the bought option cost in three years, at the size we expect to be?
• Who inside the business would own a custom system?
• Could we buy most of it and build only the part that does not fit?

If you can answer these, the decision is usually clear. If you cannot, the answers are worth finding before anyone writes a line of code or signs a contract.