Software Solutions — To Build or To Buy?
In today’s highly technological business environment, many managers are tempted to put their competent IT professionals to work on any and every software solution the company needs. While this might appear to be a good idea, such managers rarely take all of the necessary factors into consideration when making such a decision. Often the cost of building a software solution is even higher than the cost of purchasing one.
There are many reasons why managers today fall into the trap of building software solutions in-house.
• Management often views its employees as free. They think to themselves, "Well, I have these people on my staff and I'm paying them anyway so I'll just make them build it." Budgets for people and budgets for software or Software-as-a-Service (SaaS) solutions are separated and non-malleable in many companies. Budgets for people are always much higher so the idea of employee-built solutions being the better option is reinforced from a budgetary perspective.
• The ongoing support and maintenance cost of automated systems is often underestimated by managers. Software breaks all the time, even when you haven't changed anything: for example, Windows may ship a patch that breaks you or a slight change in usage patterns reveals a bug that was always there. If the employee who wrote your in-house system has already moved on by then, you are in big trouble.
Many companies overestimate their ability to maintain a solid backup and restoration infrastructure for the inevitable day that a disk drive goes bad. Software-as-a-Service providers are pretty good at keeping their own infrastructures up and running, and highly available. If the build versus buy solution includes considering a SaaS vendor, keep in mind that there is a higher risk of data loss for internally managed systems than with a SaaS vendor. This higher risk needs to be added to the cost of long-term maintenance of the internally managed system. Similarly, viruses and worms are more likely to attack your in-house systems than systems managed in the cloud. If SaaS vendors weren’t good at managing these threats, they wouldn’t be in business.Continued on the next page