April 15, 2021 7:43 PM

Build vs Buy Software: The Eternal Battle

Kalyan Vajapeyajula

Build vs buy software is a challenging question with different answers for each case, especially in the business case for Master Data Management.

As organizations deal with a rapidly increasing volume and complexity of master data, they inevitably reach a critical tipping point where they recognize the importance of having a single unified source of their data to achieve their long-term goals.

Whether this data comes from the product, customer, or location domains, you realize a multi-domain Master Data Management (MDM) solution is the key.

Now comes the million-dollar question: Should you build or buy the software solution?

The Build vs. Buy Software Decision

For executives looking for ways to innovate, but also streamline their business, the decision between building in-house software versus buying an external solution can be fairly complex.

Why should we buy this vendor’s software instead of building our own?”

It’s a fair question.

You are proud of your IT and development teams and are confident in their abilities. They are maintaining your current IT infrastructure and data ecosystem. So, how hard can it be to build a roadmap and put together a single application?

Who should build their own software?

Let’s consider a hypothetical first. Say your child wants to play the latest video games on a PC.

You have two choices: You can either buy the latest gaming laptop or build a gaming PC for your kid.

Top gaming laptops today are engineered to give you high-octane, immersive gaming performance with clear sound, clean graphics, a responsive keyboard, and fast network connectivity for online gaming. They have all the bells and whistles that you might need for the latest games in the market. You simply have to walk into a store and pick up the gear, and you’re ready to play in a matter of minutes.

But maybe your child wants to play a very specific game, not very popular, that she’s really fond of. None of the laptops in the market can render this game well; it has unique requirements that need to be met – a rare graphics card or a particular sound card.

On top of that, let’s say that you have the required expertise to build a custom PC with these unique components. You know that procuring these components can be expensive and the effort laborious, but it is the only way in which your requirements will be met. Then it is certainly worth all that trouble for you to build that special PC.

In a reasonably mature market, like the one for MDM and Product Information Management (PIM) solutions, most businesses will find that their needs will be met by products that are already in the market, without needing to build it themselves (even setting aside the cost consideration, which will still suggest you buy).

But if you feel that you are a unique business with very specialized needs, and you have the ability to build the application yourself, then the decision follows that you build it yourself.

The Challenges of Building Versus Buying

In our experience, businesses thinking about developing their own applications underestimate the challenges of successfully doing so.

In particular, when businesses explore building an MDM or PIM solution, they undervalue three significant factors in their build vs. buy decision framework:

1. Technical expertise

Developing specialized and complex software like an MDM or a PIM is very hard with inherently no silver bullet. Your first considerations:

  • You will require a dedicated team of architects, developers, testers, and deployment specialists, and then UX and design specialists to make it usable and accessible for all company users.
  • Your data stewards and managers will need to articulate all their feature needs and functional requirements for the team to develop.
  • Coordination and communication between all of your teams will increase nonlinearly with complexity and with increases in application size.

Beyond the initial conversation, a few deeper questions to ask yourselves:

  • Is this your development team’s core competency?
  • Can you do this faster, better, and more efficiently than a specialist vendor catering to this need with hundreds of person-years of experience to work with?
  • Will this effort, just to maintain the status quo, be worth it, while your organization’s direction constantly evolves? After the first build, can it then scale as your company evolves?
  • Can all of this be done fast and well enough to fulfill your team’s needs without compromising your strategic calendar?

Even if everything works exactly as you want it today, the future brings more challenges with it. As new technologies and database structures emerge, your team will need to absorb new resource coverage, bug fixes, time, and financials of the project. And your users will need regular support.

2. Industry expertise

As you consider the ‘build vs buy software,’ your industry expertise is perhaps the facet you are, counterintuitively, most likely to underestimate. You might feel confident that you understand the precise needs of your business and so are best qualified to build in-house.

However, no single business possesses the breadth of understanding and knowledge of the needs of an industry the way that a vendor catering to that domain does.

On any given day, a SaaS vendor like Riversand communicates with hundreds of present and future customers as well as consults with panels of industry experts and analysts. Our knowledge embeds a cultural matrix of applications, industry standards, best practices, use cases, and industry endpoints, all of which change continually and influence the software.

As such, most MDM vendors are constantly challenged by their existing and prospective customers. So, the incentive to stay on top of iterative refinement of product and industry knowledge is much higher for a vendor than it is for an individual business.

3. Specialization vs. generalization

Let’s say you go ahead and build the application. An application built by you for your internal users is designed to cater to your company’s specific needs, as determined at a specific point in time.

For this reason, the product will start to deviate from your idea of perfection almost from the very first day it launches. Evolving user needs, emerging technologies, market trends, or even new strategic business goals will cause your application to become obsolete quickly.

And that’s when you’ll realize the challenges of modifying the application, such as:

  • Changing analytics rules
  • Adding new retail endpoints
  • Changing workflow conditions
  • And…this list could go on, specific to the changes of your business that were initially unaccounted for.

You’ll also realize that these changes are oftentimes more expensive to execute than building the original application. And that’s because the application was probably not designed to be upgraded.

Because SaaS software vendors build applications to serve a broader set of customers, their applications are always designed to be upgraded and expanded easily to serve these customers. As a bonus, when the application gets upgraded for the needs of other customers, you gain too.

Buying a SaaS MDM Platform Shrinks Your Time to Value Drastically

For most businesses looking for MDM or PIM solutions, a SaaS platform purchase provides the best time to value as it connects your actions to results in no time. Think about the financial and operational challenges of building your own software like starting a capital project and then compare it to the ease of dealing with a SaaS vendor like Riversand.

Even if an “off-the-shelf” solution does not initially cover all use cases, Riversand’s flexible platform can give you the best of both worlds – providing tools to easy-build your specific functional needs while remaining adjustable to the advantages a SaaS delivers.

You can trust the expertise of a Gartner-recognized MDM industry leader to help you through the software-buying process and meet your evolving needs whenever you need it.

Let us show you how Riversand can help you customize the solution to a certain extent to suit your requirements. Click on Book a Demo at the top of the page and let’s start the conversation on what may work best for you.

About The Author – Kalyan Vajapeyajula

Kalyan Vajapeyajula is the Product Marketing Manager at Riversand Technologies where he demonstrates the value that PIM and MDM solutions can bring to customers of different verticals and at all stages of growth.

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