Build or Buy Your Next Analytical Software Solution?
What is the right way to go when considering necessary technology? Should your company buy a software package that solves most problems or build a custom solution designed to specifically address your needs? This challenge plagues many leaders in today’s business landscape. Business moves faster than ever, and with the amount of data being created, it is only going to continue to accelerate.
If you’re looking to build your own analytical software solution, that’s an involved process requiring specifications, servers, analysts, project managers, developers, database system, visualization software and business domain expertise.
To start the project in-house, you must define the problem, determine the team and get permission or prioritization for the resources required. Once you have the go-ahead, you must further define the problem to acquire the proper server, database and visualization platforms. If your company has the technical components available, then they are ahead of the game. If not, you will have to outsource the components and have the environments created and configured. It doesn’t matter the size of the company or whether the solution is located in a virtual or physical server environment; these steps must be taken before building the software solution.
After you have your problem defined and have created an environment ready to handle the development of the solution—what’s next? It is time to define the requirement- so software development can begin. To successfully accomplish this task, the solution should be explained and documented in detail by a business analyst and team member with domain expertise. Once the requirements are defined, you can begin to build the solution.
The process we just detailed is how many internal projects start. Some of the steps can be done in a different sequence, but they all must be completed if your project stands any chance of success.
Thus, before you’ve even begun to build your technology, you’ve gone through the following steps:
Defined the business problem
Obtained permission for the employees/consultants to work on the project
Acquired the physical environment
Created the business requirements
The pre-development steps may have taken you as long as six months, and it’s finally time to get started on development. While it may seem you haven’t come closer to answering your business challenge, finally all the building blocks are in place to start developing your solution.
There are many techniques you can use to develop software—waterfall, iterative, agile or spiral approaches. But each of these requires continuous business domain expertise along with project management to ensure success.
If everything goes flawlessly, with dedicated resources and a singular focus from the business domain experts, you may be able to complete development in about 18 months. To meet this goal, all resources must be dedicated to the project for the entire duration. That is not likely when everyday core responsibilities of the business and technology team members are still at play. You could use consultants to augment the in-house team, leading to a major cost increase and potentially elongating the timeline.
Upon completion of the project you will have additional factors to consider including ongoing enhancements, product maintenance, product support, ongoing licensing, server patching, user management, data management or data quality issues with our in-house solution. This myriad of factors is normally referred to as “total cost of ownership.”
These long-term requirements and the development steps we outlined are all factors your company needs to consider when deciding to build versus buy.
In today’s demanding business and technology landscape, companies cannot dedicate valuable resources to internal projects that detract from the core business. Thus, the “buy” option is an attractive one. When buying a software product, companies have two options; buy a software package to install and administer on their own hardware or buy a subscription to cloud hosted software that meets the needs of their business challenges—referred to as Software as a Service (SaaS).
SaaS removes the burden of hardware and software installation, configuration and maintenance that comes with a straight software purchase. In a SaaS model, a dedicated team of third-party experts solves common business problems that surpass what a company can accomplish as an internal project due to the many barriers discussed before.
The SaaS team is dedicated to solving a single business issue without distraction or competing internal initiatives. Dedication to the problem allows the SaaS team to spend more time and resources on the solution, whether it is data quality, processing speed, new legal requirements, modern visualizations or simply adding new features based on ongoing requests. The right SaaS partner can have an answer to your business problem in a matter of weeks. It is this singular approach that sets the SaaS option apart from an in-house solution.
WHAT DOES THIS MEAN FOR YOUR BUSINESS?
What happens after you build or buy an application? How do you maintain it? How do you ensure the availability of the application? How do you add additional data? What about additional analysis of data?
In a build model, all these questions are additional responsibilities that need to be assigned to an already-at-capacity technology or business team. In the buy model, the business pays a subscription for software that is ready to go and will continue to evolve. This means the onus for maintenance and continued development falls on the SaaS team, and often enhancements to the product that continue to solve business problems will be released before your business even knew you needed them.
The SaaS model provides a faster solution to the business challenge, a lower total cost of ownership, continuous upgrades, no hardware or database requirements and domain expertise. This model removes the hurdles of building your own solution, providing an answer in weeks rather than potentially years. A business can run a SaaS model for years for less than the cost of building a custom internal solution.
The SaaS approach is a better option for most companies. With the pace of business only increasing, the agility and cost of a SaaS business solution far outweigh the effort and expense of building a solution in house. With SaaS, companies can focus on serving their clients, leaving the development of software solution to focused software companies.