Buy or Build
What makes more sense for your organization?
Whether it’s due to financial due diligence or a desire to leverage the technical expertise of your Salesforce consulting partner or your internal Salesforce team, when the point comes, that you want to add your Project and PSA business processes to Salesforce, your first thought might be, ‘Is this something we can build ourselves?’
You can (and should) evaluate several SaaS solutions to understand how each option meets your requirements. And you may get close to 100% of what you’re looking for.
But, you’ll never have total control of the SaaS solutions product roadmap. While you can give feedback, it’s not guaranteed to make it into the vendor’s solution.
You have 100% of the control over how software functions when you build it in-house. Period.
However, with that control comes a great deal of responsibility. You make ALL the decisions. If you’ve ever built a custom home, you know the unique fatigue of choosing a plethora of details in a short time, what if you make a bad design decision?
It’s a narrow win here for ‘Build’, as provided that you have the budget to meet your ambitions with ‘Build’ you will always have more control over every part of the solution than is possible with ‘Buying’ a vendor’s solution. However, it should be noted that as AppExchange solutions let you configure and tailor them to your own use cases, the build advantage here is narrow.
Buy 0 – 1 Build
The SaaS solution of your choice owns all costs associated with building and maintenance and charges you a subscription fee for ongoing access.
Because the SaaS vendor gains efficiencies across a large customer base, they can often charge a lower amount than you would pay to support a one-off application.
The software builder (that’s you) bears the entire cost burden of homegrown software. That includes paying for the initial buildout, ongoing support, bug fixes, upgrades, platform migrations, and keeping up with software industry trends.
All of these costs can add up to hundreds of thousands of dollars (if not millions!)
Buy 1 – 1 Build
One of the biggest misconceptions of the ‘Build’ over ‘Buy’ argument is that ‘Build’ will save you money. This misconception comes from the failure to properly account for all the costs involved in ‘Build’, along with the ‘Planning Fallacy’ first raised by Daniel Kahneman in 1979. ‘Planning Fallacy’ is a phenomenon in which predictions about how much time will be needed to complete a future task display an optimism bias, and underestimate the actual time & cost needed.
At the end of the day, the vendor’s SaaS solution is a known cost whilst the ‘Build’ option is an unknown cost, based on underestimated effort and cost needed, for building against a use case that you don’t have experience in building for before.
SaaS vendors handle all the maintenance behind the scenes and roll the cost into your subscription fee. Their staff will help launch the platform at your organization, manage maintenance going forward, and push out product upgrades.
And the SaaS company has already done it hundreds of times, so they come equipped with best practices based on a wealth of direct experience.
You’re on the hook for all maintenance related to your newly-built software. That means managing the launch, bug resolution, user training, password setup, compliance with industry standards, and building new functionality.
And all that maintenance likely requires means taking your team of other key activities, increased bandwidth or even extra staff.
Buy 2 – 1 Build
Maintaining and documenting a custom built solution takes time and costs you money. Even when your maintenance costs are low, then the alarm bells should be ringing as your business is still losing out, as it means your ‘Build’ is not getting enhanced, all the while your competitors are using a purchased solution from a vendor, that goes through multiple feature releases a year, adding value with each release to your competitors, while you stand still.
Purchasing a SaaS solution takes opportunity cost right out of the equation.
You can continue to focus on your core profit-generating activities, while taking advantage of the SaaS solution’s already-live functionality in a much faster time frame. It’s a win-win.
Building software in-house can steal precious internal resources from high-profit opportunities.
Let’s say you’re in the business of selling bread. How much more bread could you sell with the resources you’re dedicating to building software? And how much market share could your competitors gain if you divert your attention to a non-profitable activity?
Buy 3 – 1 Build
Opportunity Cost Verdict
A clear win for ‘Buy’ here, as it allows your team to focus solely on the reason that you are in business in the first place.
Buying a SaaS solution such as one of the many tools available on the AppExchange shrinks your time to value drastically. Your time investment is reduced to the time it takes you to evaluate SaaS solutions, decide on one, and launch it internally.
One of the AppExchange Project Management & PSA solutions will provide the fastest window to connecting your goals to actions.
Think about the goals you want to reach using newly-created software. If you build it internally, how long will it be before you can make any headway toward those goals?
Even just building a version 1.0 of a well-functioning, user-friendly platform can often take at least 6 months to a year, once your factor in the time to get requirements together and pull your team away from their core work. Can you afford to wait that long? How about for Versions 2.0 or 3.0 when you really start to see the value?
Buy 4 – 1 Build
Time to Value Verdict
If speed of time to value is your aim, there is only one way to go, start evaluating the available solutions on the AppExchange today.
Purchasing a SaaS solution reduces your risk on several fronts, firstly from a financial perspective there is a known cost to your organization, allowing you to budget accordingly.
Perhaps more importantly with a reputable vendor your technical risk is also minimized, from the availability / uptime of the solution, to the backend technical knowledge being documented and spread amongst a whole team dedicated to the ongoing success of the solution.
Building software in-house comes with inherent risks, as you are dealing with the unknown it’s easy for your cost estimates to blow out as mentioned earlier.
But more importantly to your business is the technical risk of putting the maintenance of a key business process in the hands of one or two people who either work for your or a consulting partner. What happens when one of those key people moves onto a new role, and you’re left trying to work out how the spaghetti code in the back end fits together?
Buy 5 – 1 Build
You have no control over where your or your technical partners technical team might be working 6 months from now, the risk of the key knowledge behind your custom tool walking out of the door is something that you don’t have with a reputable SaaS solution vendor.
Buy 5 – 1 Build
Your choice to build in-house software versus purchasing a subscription to a SaaS solution should be a considered one, and should be impacted by the importance of your requirements, e.g. are they part of a key business process that drives your organization’s overall mission and KPI’s?
Make sure you evaluate with clear eyes and a full heart all the relevant factors, including control, cost, maintenance, opportunity cost, time to value and risk. Armed with this knowledge you can make an informed decision for your business.
Talk to a Cloud Coach advisor who can help point you in the right direction