No matter if you're a family-run company or a startup — sooner or later, you will be faced with the question of whether you should buy standard software or have it custom-built (build vs. buy).
Of course, the buy versus build dilemma is not an easy one. At TRIGO, our core business is to build custom software for our customers every day. Does that mean we always recommend custom software? Definitely not. We put together an array of scenarios where you should consider building custom software and the advantages and disadvantages of standard and custom software.
Standard software is a product for the masses built for many customers, and has sufficient functions for most users. We're thinking sevDesk (billing), photoshop (photo editing), and notion (project management).
However, it can never cover everyone's needs and wishes.
Custom software is developed for specific customers or problems. It takes longer to build, but it's tailored precisely to your needs, challenges, and business processes.
Generally speaking, custom software solutions only make sense when built in and around your core business. Things that are secondary to your business, such as issuing invoices, should always be covered by standard software. It's simply neither advisable nor feasible to spend thousands of euros on custom software if that process is not the primary driver of your business.
One of the most significant risks for companies is their dependency on others; whether you use custom software or purchase standard software from externals affects just how reliant you are.
Buying software means you have no control or decision-making power over what happens to the software — it all depends on what the provider delivers. Yet you can also significantly benefit from the service provider's know-how as well as other users. But in the end, the voice of the crowd wins.
If you want to have complete control, a custom software solution is the way to go. Although you may not be able to benefit from the know-how of others, you alone decide what way your software should function. It is up to you how the software is developed further and which functions are built — which can also control your economic success.
Entrepreneurs always have to watch their costs — so the price and long-term ROI will also play a significant role in building or buying software.
A significant advantage of buying software is the comparatively low price. Because software off the rack has thousands, if not millions, of paying users, the cost can be kept low, which can be a plus, especially for small businesses or start-ups.
Anyone who wants to have custom software built can expect a higher price ticket. Off-the-shelf software might suit the masses, but a tailored solution will only fit one company, yet perfectly at that. It's an incredibly powerful tool to increase productivity, user experience, and employee satisfaction — quality comes with a price tag but pays off in the long run.
How long you have to wait for a software problem to be resolved, of course, depends on the type of software you have.
Most of the time, when you buy software, you can be sure that it does what it says on the tin. The problem: you have to adapt and always wait for updates, which can sometimes take a painfully long time.
You're in charge and get to decide when and how a feature is changed and put out into the world. At TRIGO, we leverage Cloud Native Infrastructure, enabling us to keep the software up to date, correct technological errors quickly, and deploy a new version in the shortest possible time.
Of course, before you dive in, it is also interesting to know how high the opportunity costs will be and how long it will take until you can use the software.
The opportunity costs of buying standard software are close to zero. If you purchase ready-made software, you can usually use it immediately and enjoy the advantages right away after a relatively short training period. You can, however, expect that you will eventually reach certain limits.
To be frank, you have to be a little more patient with custom software — building software doesn't happen overnight. If you want to deep dive into just how long digitalization takes, then go ahead and read our article here. It usually takes a while before you start to see the benefits, and more time has to be invested by the entire team, but the long-term ROI is usually significantly higher.
The software can represent extreme added value for a company or even create a USP (Unique Selling Point) — technology can clearly differentiate your company from the competition and offer a better service.
The added value that off-the-shelf software creates is always different. From complete failure to a great match, you can end up with anything in between. The point is to ask what precisely the issues in your business processes are and how technology could step in to solve them. That is why we usually run through a discovery phase with our customers — which is a fantastic way to define these issues.
Custom software usually adds a ton of value to your company because it's perfectly adapted to your needs. We've seen that implementing custom software can increase efficiency, employee satisfaction, and revenue from past projects.
It usually takes at least a year for custom software to be profitable. A great example of this: internal costs for employees can be eliminated because the software does the work. Here's a concrete example from one of our clients:
With our client, SunRocks GmbH, we built a technically sound database that offers the company the flexibility to scale its business processes and add options. Today, SunRocks GmbH does with two employees what comparable companies do with ten.
The following table gives you a better overview of what we categorize as the better variants in each category. As you can see, the question of whether you should build or buy can be answered with the common statement: "well ... it depends" — and to be honest, it really does. Every company is different; ultimately, there are many factors to consider before making a decision.
| Buy | Build | |
|---|---|---|
| Verification | x | |
| Costs | x | |
| Maintenance | x | |
| Opportunity Costs | x | |
| Create Added Value/USP | x |
Software nowadays is no longer black or white. Integrating and exporting data to leverage it elsewhere has never been easier, which is why hybrid solutions are often the best ones out there.
In many cases, the perfect balance looks a lot like this: a finished component is used to build custom software — a scenario that has become more and more popular in recent years.
Do you want to ensure your company has a solid baseline in the long term? And are you convinced that building your software is the right way to go?
Go ahead and email our CEO Christian at hello@trigodev.com — so we can talk about your needs.