Organizations are often overwhelmed when determining whether it is better to create or purchase software. Nevertheless, the advantages of custom software outweigh buying already existing programs for most organizations in the long run. However, building up a software program from scratch can take a lot of time and resources.

This article discusses both options for purchasing off-the-shelf software and developing custom systems. Conversely, creating software from scratch requires money as well as much time. This article will examine pros and cons that come with each approach and give specific instances where either building one’s own software or purchasing one would be best suited through the information provided. This article will look at factors to consider when deciding this question as well as real world examples of these choices in action.

Build vs. Buy Software Decision: When settling on build versus buy decision, there are various things to take into account such as: cost; time; know-how; customization; maintenance & scalability.

In this regard, it is absolutely true that creating software from scratch allows one to adapt and match it to particular needs or demands of the company. Conversely, off-the-shelf software may be incompatible with the specific requirements of an organization. As much as some applications can be customized to a certain limit, custom developed software could give a competitive edge through unique attributes and operations not supported by off-the-shelf solutions.

One other benefit of building software from scratch is its scalability in terms of future growth. What this means is that businesses can add new features or functionalities as they evolve over time. On the other hand, off-the-shelf software may not have enough scalability for future expansion. While there are scalable applications in place already, tailor-made ones can suitably handle the projected growth needed within the enterprise.

Ownership and Control:
In the course of a company’s software development, they are the ones who own and control what is produced. The organization can therefore decide on the features, functionalities as well as security measures put in place within the software. Another thing is that sometimes organizations have less power over off-the-shelf software especially when it comes to matters regarding security thereby giving way for cyber attacks or data breaches. Otherwise, if an organization lacks expertise and resources, creating such software in-house may be unsafe.

Building software requires specialized skillsets in software development which may not be present internally. However, buying them does not need one to have knowledge about developing software since developers have already made these programs ready to use. Nevertheless, custom-built applications can be created specifically for meeting the particular needs of a company which means that there must be special expertise required.

The vendor has a duty to maintain and update the software upon purchase by an organization of off-the-shelf software. This is a good way of saving the organizations time and resources. In-house maintenance can become costly and time consuming on the other hand, while a company may have more control over maintaining Custom-built Software (CSB); this can be a pro or con depending on its levels of resourcefulness and expertise.

The three pillars of the build vs. buy decision are:

  1. Cost: Cost is the first thing to be considered when deciding whether to build or buy. It means how much it will cost for a software ownership as a whole, including the development price, renewal licensing and upgrade expenditure. The cost of developing an application from scratch can be high but in some cases long-term benefits may outweigh initial investments. Contrarily, purchasing software might be cheaper at first but it may not provide required customization or scalability.
  2. Time-to-Market: Time to market is another factor that should be considered. This refers to the time taken developing, installing and launching the software. Developing software from scratch will take some time hence several months or even years are spent on its screening and implementation. Conversely, purchasing software can save time during installation since it comes ready developed.
  3. Strategic Fit: The other most important consideration is strategic fit. This shows how well the solution fits within the organization’s strategic goals and objectives. Making new programs allows for full customization of the program which may dovetail well with organizational needs and wants when such exist. However, purchased programs do not suit very specific requirements of a company because they cannot offer right level of specificity needed as well as flexibility those kinds of applications usually lack.

Advantages of Developing Software:

  1. Flexibility: In designing the software specifically for an organization, customized development can be carried out.
  2. Exclusivity: If produced by an organization, they will have full ownership rights over it.
  3. Expandability: Developmental system has potential to accommodate future growth because it is expandable.
  4. Competitive Edge: A tailor-made application could ensure competitive advantage as far as exclusive functionalities are concerned which are not possible with off-the-shelf applications.
  5. Security: Developing the software in-house allows for stronger security measures against data breaches or cyber attacks.

Disadvantages of Developing Software:

  1. High Cost: To make software from scratch, one must employ developers and buy tools and equipment.
  2. Time: Designing code testing are major steps involved in developing a software, which may take long periods.
  3. Expertise: Developing software necessitates the possession of software development capabilities that might be lacking from an organization.
  4. Maintenance: A company’s time and money may be spent for nothing if it attempts to keep the software at home.
  5. Risk: Businesses may slip deadlines or produce substandard items or products that don’t suit their operations when they make things on their own without having any knowledge base or resource structure for this type of work at hand.

Advantages in Purchasing Software:

  1. Cost: The cost of using a premade software program is less than that of building one from scratch, and it can be shared by multiple users.
  2. Time: It takes very few days to get hold of an off-the-shelf software, which means shortening the implementation time.
  3. Expertise: This software is already pre-programmed; hence, no need for any expert to buy it and use in any business establishment.
  4. Maintenance: The organization saves time and resources because the vendor upgrades and maintains the software.
  5. Support: Sometimes vendors provide technical support services to make sure that this application works well with other systems online connected with such an institution.

Disadvantages of Purchasing Software:

  1. Customization: Some commercial programs might lack sufficient customization for an enterprise.
  2. Ownership: The ownership and control over the software programs is not total by the organization.
  3. Scalability: Prepared software can fail to be sufficiently scalable in order to meet projected future growth in a company.
  4. Competitive Advantage: A firm can lose its competitive edge due to presence of similar sets of these systems with other firms.
  5. Security: The security measures used with off-the-shelf software are more passive and may lead to hacking or data theft due to cyber-attacks.

Real World Examples:

  1. A small retail business wants to track its inventory and sales.
    In this case, it would be ideal for the firm to buy software from a store. Some of the off-the-shelf systems include QuickBooks and Zoho Inventory that are supposed to perform such tasks. These programs can be afforded even by very small businesses and can be implemented immediately.
  2.  A large financial institution wants to develop a mobile banking application.
    Building software from scratch is recommended in this situation. Developing a mobile banking application entails customization, as well as knowledge about software development. It also must scale upward for increased loads. Custom applications will have mobile check deposits, balance transfers while being unique in user experience

This decision as to whether to build or buy software should consider elements like cost, time, expertise, customization, support and growth. Sometimes, purchasing a product off the shelf is preferred over building from scratch. This will depend wholly on what the company actually needs.