Solutions and Services
Build or Buy?
Are you wondering whether to invest in an off-the-shelf solution or product or have a solution built according to your requirements? Many companies face this question in their planning process when they recognise that modernisation and investment in the introduction of new systems are important factors in the competitiveness and success of the whole company.
Companies that decide to give priority to developing their own solution rather than buying one off the shelf usually do so for the following reasons:
- the solution will be cheaper because it will only do what we need it to do
- the solution will be made to measure and will not limit our requirements
- new requirements will be quickly added to the solution
Experience shows, however, that most such projects sooner or later run into problems and the above conditions are seldom if ever satisfied. Let us explain why we think this happens.
High costs for the development, administration and extension of functionality
The cost of developing one's own bespoke solution include the creation of specifications, analysis, design of the user interface, architecture and possibly the creation of application content. A further and even larger "item", however, is the need for a detailed analysis and design of a method for designing, developing and implementing a solution that is simple at first sight.
The design for the solution itself is defined by the known needs of the given department or the whole company and therefore it is not so difficult for the responsible person to define clear requirements. Due to the insufficient experience of managers in designing and developing client oriented solutions as a whole, however, it takes a long time to produce specific requirements where intensive cooperation with the IT department or contractor is needed. Resources are therefore invested in the definition of functions where an optimised solution has already existed for a long time.
This greatly increases the workload on internal resources and also the contractor firm, causing the project to overrun and go over budget.
Where requirements are really simple it is possible to end the first phase of the project quickly and at low cost. Later, however, the requirements for the system in every company change and grow. Future changes are usually ignored when designing an application in order to make savings and the project may become many times more expensive as a result. When using an off-the-shelf solution the client has immediate access to a number of reliable standard modules for a favourable price, which can easily be configured to the needs of the given case. In consulting and specification work the client and the contractor are therefore able to concentrate on just special requirements and tailor-made services. The off-the-shelf system is designed from the bottom up to permit extension for special purposes. Implementation is based on a fully developed project system which reduces the time and budget required for the overall project.
When designing a more complicated solution, the initial investment in licences for off-the-shelf solutions avoids the risk of a project that overruns and goes over budget and does not in the end produce the expected result. Even in the case of simpler requirements it is more beneficial in the long term to make a large initial investment than later expensive changes.
System functionality
During the design and development of one's own solution there may be conflict between functionality requirements and the available budget. The budget can be kept at a low level only at the cost of reduced functionality including the budget for system administration. This, however, means that that the benefits of the application are less than the original requirements. Furthermore, additional changes requested later disproportionately increase the original budget and growth in this area often leads to a complete change of system.
In contrast, an off-the-shelf solution provides a number of standard functions which are often difficult to develop at a very reasonable price, which are ready to support future expansion of requirements. This means that the client does not have to compromise on the side of functionality and administration.
Risk to the success of the project
When designing an individual solution there is always a significant risk that cannot always be fully covered. Often the client does not get a clear idea of how the system will be used until the project has reached an advanced stage. This often results in conflicting requirements and overruns at the specification and consulting stages and failure to complete the project on schedule. The finished application is installed for the first time and therefore there are likely to be a large number of bugs. Because of the need to design standard functions there is not enough time to design what the project was originally intended for – providing new services, improving communication, raising the quality of existing services, improving client-partner relations and so on.
The use of a suitable off-the-shelf solution minimizes these risks because the client can try it out before start of the project. A precise, tried and tested implementation plan reducers the risk of the project overrunning. There are fewer bugs because the functionality has been tested in many projects and there is support available to fix those bugs that appear during the project with the client.
Conclusion
The decision to develop one's own solution rather than use an "off-the-shelf" product is motivated by a number of expectations. Analysis and real life experience clearly show however that not one of these expectations is supported by real outcomes.
On the contrary, a suitable "off-the-shelf" solution allows key objectives affecting the success of the whole company to be met – a shorter period for return on investment, provision of a wide range of functionality at a favourable price and minimal risks associated with the project.