Build vs. Buy: The Software Dilemma

This is unmistakably one of the oldest questions entrepreneurs have to answer at some point in their business journey. A customized approach is a crucial competitive advantage in the customer retention process since the beginning of digital transformation processes. Nevertheless, sometimes a pre-built software solution can do the trick without much damage.

With so many variables to consider, it's difficult to know where to start. Therefore we compared both options. While this article is not a step-by-step guide, we believe it will be helpful for those who are faced with this dilemma.

When do business owners face the software dilemma?

When the need for a software solution appears, companies usually consider ready-made software solutions. Why? Because they are easy to implement. When it becomes clear that none of the ready-made products answer the business need, they start considering a custom-made software solution.

Before making the decision though, it is advised to think thoroughly about the following factors:

  • Price - every company struggles to reduce its costs. Our question - build or buy? - arises two (very valid) arguments. First, an off-the-shelf solution brings immediate benefits once implemented. Second, creating custom software can be a financial burden for the company.

Now, the thing is that a pre-built solution requires either a large single payment or a monthly payment. Meanwhile, a custom solution will eventually pay for itself.

  • Maintenance - in the case of the off-the-shelf software, you don’t need to worry about bug fixes, database updates, etc. However, since the solution is supported by a vendor, you will have no control over certain operations (such as shutdowns, bugs, updates, etc.)

  • Customization and scalability - the main thing here is that software developed for you has the ability to scale and expand however you need since you design it according to your business needs.

Pros and cons

Building software Pros Buying software Pros
High customization Fast implementation
Solves specific problems Relatively low costs
Easy to integrate with other tools a company use Maintenance is made by the vendor
Complete software ownership
Complete control upon software operations
Building software Cons Buying software Cons
Relatively high costs Complete dependence on the vendor
Potential risks related to the development and additional costs It may not solve all the business needs
It may end up costing more than a custom made solution because of a recurrent fee
It won’t provide a competitive advantage; it is possible the competition already uses the same solution

To sum up, buying vs. building software requires a thorough analysis of pros and cons and perfect comprehension of your business. Nevertheless, in most cases, a custom-made solution is the right choice for a business’s success.

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