Build vs Buy: Enterprise Software's Decision-Making Parameters

If you're creating a new application or are in the process of doing so, you should think about your reporting requirements and development approach. If your app is already live, you should assess how satisfied your users are with the reporting features and make plans to improve them.

Most apps require some kind of reporting functionality, and getting it properly lowers operational costs, boosts productivity, boosts user satisfaction, and even helps differentiate products.

So, whatever stage or circumstance you're in, you're aware that you'll need to assess the benefits and drawbacks of constructing versus buying your reporting solution.

When deciding whether to build or buy, most businesses consider the following factors:

• Control - How much control over the product software do we require?

• Cost – What is the cost in terms of money and internal resources compared to the expected return?

• Time - How quickly can we bring this product to market, and when can we expect to generate a profit?

What is Enterprise Software?

Enterprise software is a form of software used by organisations to solve their day-to-day issues. In other words, it caters to the organisation's demands rather than those of its customers and clients.

CRMs, inventory management systems, product Engineering / information management systems, and even HR management systems are examples.

Build VS Buy

1. Technology & Compatibility

When choosing a report solution, integration compatibility can be a deal-breaker. Some solutions are simply unsuitable for your needs, as the adage goes: "square pegs don't fit in round holes."

Integration ease varies greatly among third-party software packages. Many packaged software solutions, on the other hand, allow you to perform a proof of concept (POC) before you invest in a solution.

If you choose to build your solution, compatibility is not likely to be an issue. However you’ll still need to consider how your solution will connect to its potentially disparate data sources.

2. Features

When choosing a report solution, integration compatibility can be a deal-breaker. Some solutions are simply unsuitable for your needs, as the adage goes: "square pegs don't fit in round holes."

Integration ease varies greatly among third-party software packages. Many packaged software solutions, on the other hand, allow you to perform a proof of concept (POC) before you invest in a solution.

Compatibility is unlikely to be an issue if you design your own solution. However, you'll still need to think about how your solution will link to its many data sources.

3. Performance

The ability to meet performance criteria is only as good as the most elegant solution.

You must not only evaluate your present performance requirements, but also look forward to seeing how your requirements may change over time and how you will address them.

There are numerous potential points of failure and performance bottlenecks within any solution.

You wouldn't drive a school bus to a Formula One race, would you? You must ensure that your equipment is capable of completing the task.

4. Design

Will you be using a developer or a designer to create your reports? If the preceding is correct, you'll need some lovely pre-made templates. If the latter is the case, you'll require an extremely user-friendly interface. Having both would, of course, be ideal for everyone.

Any well-designed report may swiftly and effectively deliver the necessary information. Customer-facing documents, on the other hand, have the additional task of establishing a company's brand, style, and professionalism. You'll surely need some design freedom, but branded papers will almost certainly require very precise free-form design control.

5. Documentation, Training & Support

The capacity of your users to understand the tools and acquire the results they desire is critical to the success of your reporting system.

Complex reporting solutions are common. Even for experienced analysts, working with data can be complicated or frustrating at times. Most people rely on a set of tools to help them reduce errors and boost productivity, and each of those products is likely to take a different approach and have its own user interface.

Documentation, training, and support can all make a big impact in your reporting solution's performance. Regrettably, they are sometimes treated as an afterthought or as underdeveloped components of a larger solution. Material development and continuous support can easily occupy as much as, if not more, resources than writing the initial code.

7. Cost & ROI

The bottom line of your 'Build vs. Buy' decision is your return on investment (ROI). The benefit of a ROI analysis is that you'll have a clear number to look at and communicate with other stakeholders. The disadvantage is that your calculations will only be as good as your assumptions and thoroughness. This paper should aid in the identification of the most important costs and payback opportunities. However, you should definitely go deeper to find the less obvious aspects that may be unique to your company.

Estimating development costs is one of the most important variables. Despite the fact that there are volumes written on how to do it, few people believe it can be done with certainty.

Most people would agree that various sizing, scoping, prototyping, or proof-of-concept exercises will increase the accuracy of the estimates, but they can also add a lot of money.

It's critical to have a realistic understanding of the margin of error in your construction estimates, as well as your level of trust in a potential vendor's ability to deliver on time.

When is ‘Building’ the Right Approach?

Building software will benefit your company if: 

• The software will provide you with a long-term competitive advantage.

• There is no other option that can match your company's requirements.

• Your company's data collection endpoints aren't volatile or prone to frequent modifications.

• You have sufficient funds to pay the costs of developing and maintaining the software.

When is ‘Buying’ the Right approach?

If you want to acquire commercial software, you should do so because:

• Building software is not your core business and will not provide you with a competitive advantage.

• You have limited resources and would prefer to put them into enhancing your main business operations.

• There are solutions available to address the issues that your company is dealing with.

• You're seeking for a quick fix that can be implemented right away.

There's one more crucial phase in your decision-making process: giving your decision criteria weight. As you analyse each of the points in this worksheet, you'll probably find that 'Build' wins in some areas while 'Buy' wins in others. However, not all criteria are equally important, and not everyone will give each point equal weight. So, take a moment to think about not only who won in each category, but also how important each point is to you. Then a quick tally should help you arrive at the correct conclusion!