To Buy or To Build - Comparing Risks

Risks are certainly a function of both Costs and Benefits.  Higher costs increase financial risk.  Fewer benefits also increase the risk of wasted staff time and effort.  However, there are also some identifiable risk factors that go beyond costs and benefits.

A brief summary of some of those risks include:

• Financial Risks (read more...)

• Quality of Support (read more...)

• Documentation and Training Services (read more...)

• Obsolescence (read more...)

For those that have already committed to the "build your own" path, there are some points to keep in mind.

If you are using an outside consultant as your developer, or internal IT staff, InfoWorld analyst Tom Sullivan has suggested some important steps that could apply to your situation in his daily pod cast on September 1, 2007.  These steps were offered as a method to reduce dependence on outside consultants.  However, they could also apply to any custom development project, and may help in controlling your expenses.

"Don't be spoofed by money already spent" - Keep in mind that 70 % of the expenses, and of the time involved in development, will occur after the application has finished the testing cycle.  These ongoing expenses, including updating technology and ongoing support costs, are likely to climb to over twice what you may spend on an established commercial application.

"Keep a watchful eye" - Expenses may come in spurts, and accumulate over months.  Also remember, during that time you could have had a full complement of time saving tools already fully tested and functioning from an established software vendor.

"Turn control over to the higher power that is your employees" - These are the people that will use the software every day.  Be certain to include your users in any software demonstration.  They can provide experienced insight into ease of use, and may be the only qualified source to judge the time and effort the software will save them.

A custom built option will be far more costly over the life of the software.  What if it is also clear you could be saving 40 hours a week of staff time by choosing to buy, versus 5 hours a week by choosing to build?   

Keep in mind, what you may have thought would be the cheapest path may result in software that costs much more than planned, and saves very little time when compared to a tried and proven solution from an established vendor.

For anyone considering building a "home grown" system, we strongly recommend you read the article in detail and review the references provided.