What to Know Before Making a Build vs Buy Software Decision

Build vs Buy Software: Which Option Makes The Most Sense for Your Organization?

Software companies looking to bring new products and solutions to life must answer this basic question: should we build our own software internally or buy an existing product company in market?

Most companies making the build vs buy decision focus their attention on these key factors:

  1. Control – How much ownership do we need over the product software?
  2. Cost – What’s the expense in terms of spend and internal resources vs projected ROI?
  3. Time – How quickly can we get this product to market, and when will we see returns?

You want an efficient process that delivers robust software solutions without you overspending or the process taking too long. The right decision can help you expand your product offerings, gain more market share, and edge out competitors in your space.

Application Modernization Proof of Concept | POC

3 Options for Build vs Buy Software Scenarios

To help you make this critical decision, let’s look at the pros and cons of each.

Build Internally with In-House Development Teams

Building custom software internally provides you with 100% control of the project and the end product you create. However, when you build your own software, you also have 100% of the responsibility.

To build your own software successfully, you’ll need to be prepared to work through these common challenges::

  • Custom development can be expensive.
  • The process takes time.
  • Dedicated resources are pulled away from other areas.
  • Internal teams are constrained by their own priorities.
  • Ongoing maintenance will need to be supported internally.
  • Bugs or mistakes are yours to fix.

When you build in-house, you also risk your team’s focus off of other priorities or high-profit opportunities. You must carefully consider the opportunity cost of this approach.

Buy a Software Product Company

Rather than writing out software code and spending countless hours creating a product in-house, some businesses opt to purchase a software product company with an existing platform in the market. 

This kind of acquisition will not be accessible to all, but it can present several advantages for those with the resources to pursue it. 

When you buy a product company and adopt its software as a solution, you save significant time and can quickly reap the rewards of an existing customer base.

However, there are a few drawbacks when it comes to buying a company with existing software, including: 

  • There’s little to no customization.
  • It will take time to build a team.
  • There’s risk involved in forming new teams.
  • Your costs may be higher.

Since the product is already in market, your ability to customize to your exact specifications will be limited. Once you acquire the company, you may be able to adapt it, but you’ll risk friction with the existing customer base.

If you don’t acquire the team with the company, you will need to reverse engineer the code and train or hire staff to maintain it. At the same time, you are responsible for the ongoing maintenance and support costs for a product that’s frozen in development unless you continue to invest in developing it further.

There’s a Third Option: Work with a Development Partner

Build vs buy can feel like a restrictive dichotomy, but there’s a third option that companies should also consider: working with a build/development partner, such as KMS Technology.

When you partner with senior-level development teams, you have the ability to create and customize the software that you’ve envisioned for your business without having to tie up internal resources or go through unnecessary overhead costs. Rather than having to hire or upskill your workforce, you get the knowledge and expertise from a software development team that’s done this many times already.

When working with a software development partner, you have a high level of control over the product, coupled with endless customization opportunities. 

In most cases, the third option — deciding to build with a partner — is more cost-effective than other options — both in terms of time and money. Your business team can stay focused on generating revenue and operational tasks while your development partners build your product to your specifications.

An offshore software development team in Vietnam

How Outsourcing Your Software Development Works

At KMS Technology, we deploy a four-step process to take your great idea and turn it into a high-quality software product. We’ve been in your shoes before. We’ve helped customers achieve significant exit values, and have built, incubated, and launched our own product companies: Kobiton and Katalon are just two success stories.

Using agile and continuous delivery strategies to accelerate the building and launch process, we focus on cost-effective and process-driven execution to maximize value.

Here’s what the process looks like:

1. Initiation

At the beginning of the project, we’ll do an assessment of your current state and work together to define the goals and criteria for success. We will create a framework for development and determine the tools and processes that best fit your needs.

2. Ramp-Up

In the ramp-up stage, we start the knowledge transfer and training across teams. We implement new processes and tools, track metrics, and execute the initial rounds of sprint cycles.

3. Knowledge Sharing

During this phase, we continuously evaluate your processes, tools, and environments for opportunities to optimize and improve. We provide daily updates and monthly reviews to keep your team informed.

4. Steady State

As we transition into a steady-state, we will continue to make improvements to both the velocity and quality of the software.

From start to finish, your business gets an engaging team and a strategic development process that will help you successfully deliver your software product to the market.

Which Software Solution Is Right for You?

Determining which approach is the right way to go starts with defining your needs. Internal discussions should focus on overall goals first as it’s easy to get focused on specific features and lose sight of the big picture.

Take time to gather feedback from key stakeholders and lean on your team’s experience. Document workflow bottlenecks and any concerns that your team may have about your current processes.

You’ll also want to take a look at who is on your team and how their skills map out against your product vision. You may need to add expertise or upskill current team members. Even if you do have the internal resources, you also need to look at your portfolio of projects. Can you afford to pull resources from one area for a new software development project?

Another key consideration is timing. In business, so much of success lies in the speed at which goals can be accomplished. You will want to evaluate which of your options gets your product in a steady state the quickest without sacrificing your strategic goals or product quality.

Making a Build vs Buy Software Decision

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Whether you decide to build, buy, or partner to expand your product offerings, the best solution should drive you toward a competitive advantage across a multitude of factors. If we can help you build better software, maximize your success, and minimize your development costs, contact the software development experts at KMS technology today.

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