Build or buy? Three software development considerations before you decide

The juggernaut of digitisation is only set to gain more momentum. From workflow platforms and e-signatures to virtual data rooms and Robotic Process Automation, companies have been adopting an array of technological features to make their team and client processes more efficient. 

But when an organisation wants to add a new string to its bow, many teams are presented with three options. Do they buy an ‘out-of-the-box’ solution, attempt to build the technology they need in-house, or collaborate with an external software development partner? 

While figures vary across sectors and businesses, a single hour of IT downtime can cost between US$1 to US$5 million, so it’s important to choose carefully. To avoid a costly endeavour, the heart of this decision needs to rest on what works best for you, your team and the company. 

It’s a tricky conundrum: to buy or to build? Here are three things teams should consider before choosing their software development path. 

Does the out-of-the-box solution match up with the company’s workflow and demands?

Sometimes the easiest option works best and that can be a ready-to-go product. But with out-of-the-box systems, company workflows need to be adjusted to suit the software, instead of curating the software around the existing workflow.  

What can often transpire is that software products don’t wholly fit what the company needs or employees don’t adapt to the technology as it’s not what they want. 

The good news is that the UK tech startup sector achieved record growth in 2021, growing by nearly two and a half times, so there’s certainly not a shortage of options and providers out there. 

However, the challenge, if you do decide to choose an off-the-shelf solution, will be finding the right specialist provider to suit your needs, and whose solution will integrate with your systems. 

Is there a future aim to make the software and service commercial? 

This is a key question to consider when embarking on a project. Even with remote plans to make a designed, developed and tested IT solution commercial, deciding to acquire IP rights can provide many benefits, including becoming a revenue opportunity. 

While fellow competitors may be using the same out-of-the-box software products, building your solution means it can be configured around current business processes, which provides an opening to forge ahead of the competition. 

If commercialising the solution isn’t on the cards, the next consideration is whether you can invest in the time, resources, tech infrastructure and more that are required to effectively develop the project. 

The risks are there to be grappled with. Research into digital transformation projects by Couchbase has shown that nearly four out of five projects were hit with failure, delays or scaled-back plans. This totalled up to costs of US$5.5 million per enterprise for failing to take off on the first attempt. 

If you do have the necessary skills, experience and talent, then opting for in-house software development is a viable choice. Otherwise, it can be a risky affair, with dangers including software failures, legacy system problems and cybercrime. 

Essentially, to counter such risks, you have to have the right skills or partner in place. 

The age-old question of in-house vs outsourcing?

This lies at the core of the ‘to buy or to build’ conundrum. As highlighted above, it's about honestly assessing whether you have the skills and expertise to build a new software solution - many in-house teams are unlikely to have this capability. 

A recent survey of 300 IT leaders highlighted that when it came to finding and hiring strong talent, just under two-thirds (63%) reported difficulties. This was joined by 54% declaring that access to talent was a compelling reason for choosing to outsource, followed by the need to save on costs and gain knowledge and experience.

One of the main advantages of outsourcing is that companies can reap the benefits of a much wider base of tech talent, leveraging markets outside of the UK. For example, this could involve collaborating with the many tech hubs operating in Eastern Europe. It’s a flexible, agile approach that means experts are ready to go from the outset, working on projects quickly and bypassing any time-consuming roadblocks that can appear with in-house recruitment processes. Companies can hire talent when they want to, for as long as they need.  

And it’s a reciprocal benefit. 74% of the companies surveyed saw outsourcing as a way to help advance and embrace better software development practices. By allowing specialists to work side-by-side with internal teams, it presents a golden opportunity to enhance and progress in-house digital skills. The outsourcing process not only provides access to external talent but helps develop your internal talent too. 

The bottom line

When considering whether to buy or to build, there are three options: buy out-of-the-box software, go it alone and build it in-house, or partner up and harness external skills and talent. 

Of these three options, partnering offers the greatest opportunity. It combines the three considerations outlined above: providing tailor-made software to match your workflow, commercialising opportunities and, crucially, an outsourced team that will both facilitate the project and give your team the training, skills and experience necessary to further business growth. 

In the end, your decision will depend on the scale of your ambition. Using the same out-of-the-box products as your competitors will only take you so far. If you not only want to keep up with the pack but lead from the front, then you need bespoke, creative and pioneering tech to forge ahead.