CRM Software - build, contract, buy or customize?
What are the advantages and disadvantages of building software-in-house, contracting the building of software, buying turnkey software, or customizing software?
The build vs. buy decision can only be made after examining your firms
strengths & weaknesses, business goals, financials, and core competencies.
One must ask, "do we want to be in the software development business?". If
the question is "no", then you need look no further -- you must buy your
software. Software development takes a BIG commitment and entails lots of
risk. For starters, you need to do requirements analysis, functional
design, system prototype, human engineering/GUI analysis, system
documentation, user documentation, training materials, training curriculum,
user acceptance testing, bug fixes, release strategy, technical support,
APIs, etc. It's not an easy task and it costs money...lots of money. When
purchasing software, you are placing your confidence in the software vendor
for the above items. Software development firms are experienced in all of
the above and can spread the cost to hundreds of thousands of users. The
downside may be software that doesn't quite meet your exact specifications,
along with loss of control over release schedules, bug fixes, and
customization options. On the upside -- you can hold the vendor accountable
for everything, software costs are easily estimated, and your firm can focus
on its core competencies.
The list of advantages/disadvantages is endless. My bias is against the
development of custom software unless it is absolutely necessary. It is
very serious and detailed work that's best left to the experts.
This was first published in October 2001