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Build vs. Buy: Which Decision Is Best for Your Company?

Should you build the software your business needs in-house or buy it from a third party (aka off the shelf)? It’s an important question to ponder, and one your company can’t take lightly.  

When considering the decision to build vs. buy, remember each path has its pros and cons. For example, building custom software gives you more control over your product, processes, and vulnerabilities. Whereas, third-party software solutions often allow for quick implementation. 

You can make the most informed decision with the right information, which we’ll cover here. 

How to Determine If You Should Build vs. Buy: 5 Things to Consider

When deciding whether to build or buy, our Revelry technology experts suggest you consider these five things:

  1. Project planning needs / approach
  2. Desired market position: Are you trying to differentiate your business or product from the competition?
  3. Ownership costs
  4. Control and vulnerabilities
  5. Organizational goals, values, and priorities

Let’s break each of these down further.

1. Project Planning Needs / Approach

If you plan to build your own software using your own team of developers, you’ll need to really understand the project’s scope. Questions to ask may include:

  • Do you have project management expertise on your team to build and effectively manage the project budget and timeline? You’ll need a designated project leader to keep key decision-makers informed and involved at each step. This person must also be empowered to provide approval and identify issues promptly, helping the project stay on track.
  • Do you have sufficient human resources (from UI / UX designers to back-end engineers to product managers) to effectively start and finish the project?
  • Do you have the time, budget, and additional resources needed to navigate unexpected challenges, such as shifting timelines and unanticipated complexities? In software development, things can go sideways fast.

Without thoughtful and detailed planning – and skilled, experienced product / project management – you risk having your effort cost more and / or deliver less. Partnering with a software development company can be a way of building custom and achieving your project goals. If in-house product development or working with a partner to develop your solution isn’t possible, buying software off the shelf may be the best option.

2. Desired Marketing Position

When making the decision to build or buy, remember that it doesn’t matter unless you’re creating value – for your business and / or your end users (employees, customers, etc.)

This is where product differentiation comes in. If you can buy proprietary technology – the technology you need and that will differentiate you from your competition – you may want to do so, rather than replicating what’s already being done. (In fact, doing the latter could get you in trouble in some cases.) If, however, you have unique needs or an idea for delivering a new and improved way of doing something, the technologists at Revelry say “build, build, build!”

3. Ownership Costs

Another factor to consider when pondering “build vs. buy” is the cost of ownership when you build something yourself. In addition to project management and creation costs, you must take into consideration long-term costs associated with hosting and software maintenance; unless someone is charged with running routine upgrades, you will eventually face security vulnerabilities and challenges. 

4. Control and Vulnerabilities

A significant reason companies choose to build is more control over everything – from the product roadmap (including tech stack, key features, etc.) to security to updates. 

By building your own software, you can avoid external dependencies and the very real possibility of the product owner / creator changing something or taking away a feature that impacts your business. 

Alternately, a con associated with building is the pressure to keep up with everything, including security. If you build everything, it can become extremely difficult to manage all of the functionality and keep up with ever-changing security threats. This is another area where a partner in custom software development may be the answer; you’ll get the benefits of a custom software product, but with tremendous support (so you can choose what you focus on and what’s handed over). 

5. Your Goals, Values, and Priorities 

While running a build vs buy analysis, you should continually check in with your business goals – prioritizing what matters most to move your business forward. It also helps to ask, “Does this decision best support our company’s values and priorities?” and “Are we delivering value in a meaningful way?”

Growing businesses often face this dilemma. The platform they’ve been using has become limiting, so they decide to build their own; or maybe they realize there are more pros to buying, freeing them up to focus on growth in other areas. No matter what you decide, ask the questions and really think through your answers.

Reasons to Buy Software Instead of Building It

If you’re still not sure, let’s recap. Here are some reasons you might choose to buy software from a third-party instead of building it yourself:

  • Time to focus more on what you and your team do best
  • No risk of scope creep or cost of ownership
  • Less concern about doing things wrong and dealing with the consequences
  • No need to worry about software maintenance
  • Spending less while still getting some complex features and functionalities

Reasons to Build Your Own Software

And now, here are a few reasons why you might want to build your own software with either your own development team or an outside partner:

  • Full control over the software’s development and features
  • Strong, focused project management
  • Having ownership over the code 
  • Forecasts show the cost will be worth it over time
  • Differentiation within the marketplace (aka from your competitors)
  • Ability to adapt based on your company’s ongoing feedback, goals, and needs

You might hear that building your own developer team is inferior to someone else doing everything for you, but, all too often, that choice leads to prohibitively expensive service agreements for apps you can’t even make small changes to. 

At Revelry, we flip the script. For products we develop with a future beyond design overhauls or MVP prototypes, we see building your own development team as an essential step in the maturation of the product. Learn more about what we do here.

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