It is fairly common for a business to determine that it needs some type of technology solution. The important question that follows, however, is whether the solution should be built from scratch, or purchased "off the shelf." Here, the right choice can save a company huge sums in both the short and long term, and help avoid an endless morass of run-away work arounds, ill-sought functionality, and critical compatibility issues. That said, some of the factors affecting the choice might even surprise you.
Your Business is Unique
For the most part, no two businesses are exactly the same. It only makes sense, therefore, that a unique business will need a unique solution. There is a serious advantage to having a system that matches your company's needs and processes. Some of the advantages are:
- Less training by the staff because they are using a familiar process
- Screens may be made to match familiar forms, further reducing training and errors
- If the new system has processes that match those that have already passed regulatory muster, certification and approvals will be greatly simplified
- Unique pieces of information normally tracked by the company will not get lost, or have to be managed outside of the system, because it is not included in a commercial solution
- You can avoid unnecessary steps and constraints that are contained in a generally marketed package
Custom fitting comes at a price
Like having a suit custom made from scratch, a custom-built technology solution is probably going to be more expensive than a solution taken straight off the rack. Unless your organization has a track record of successfully completing this type of work, you definitely want to seek the help of a qualified consultant. It has been my experience that most companies greatly underestimate the immediate cost of developing a system from scratch, and managing it to a successful conclusion. Here are some of the factors to consider when evaluating the build option, and some of the benefits you can expect from your consultant:
- Assessment of the specific needs to be addressed by the new system is critical
- Once scoped, a clear definition of what is to be built will be needed
- As with any major business solutions undertaking, there will need to be a breakdown of the project into manageable tasks
- Estimation of the materials and effort needed to build the system is essential (do not underestimate this effort as it can be a challenge for the most seasoned professional)
- Defining of parameters that will serve to track progress and success
- Identifying the skill sets needed throughout the lifecycle of the project
- Expert project management
- Testing and other quality-related activities
Whether a company goes it alone, or brings in professionals to aid in development, do not underestimate the costs. I've seen many projects halted because of budget overruns that were solely the result of poor initial estimates. This is not to say this approach is to be avoided. It is essential, however, that the return on investment be realistically evaluated.
A Case for COTS
A Commercial Off-The-Self (COTS) package is software and/or hardware that can be purchased and implemented without the need to create the software and build the hardware yourself. Because multiple customers are using the package (just think about how many people are using Microsoft Excel), the costs of development are spread among multiple companies, thus resulting in less expense for any given customer.
Consider a word processor. There is no need to reinvent the wheel, and create a word processor from scratch. The off-the-shelf word processor has all of the features you need, but with so many people using the product, the cost of it is relatively low. Even though there are some features that you may never use, they are easy to ignore, and the price is low enough that you still receive significant benefit relative to the cost.
Another benefit to consider is that the overall quality of the package may be better. Unless you are the first customer to purchase the system, odds are good that many of the bugs have been worked out before you ever acquire the product. Further, because the package is intended to appeal to a broader audience, it is also likely to include many more features than a custom-built system. There may well be features present that you just don't need, or want. On the other hand, do not be surprised if you find awesome features that you would never image existed.
One last thing to consider is that the procedures and workflow in the COTS system is different from what you currently use. While that may sound like a disadvantage at first, that would only be true of the current processes are better. This could be an opportunity to improve procedures by adopting those within the new system. It would not be the first time that I have seen a company implement much needed procedures and discipline after installing a professional COTS accounting system.
Middle Ground
In many cases, it may make sense to harness the best of both worlds. What that means in this case is making modifications/enhancements to a commercial package. Like the build decision, evaluation of this option should be done with a consultant very familiar with this approach. Some things to consider are:
- Making modifications means undertaking a development project, and all of the pitfalls mentioned above, apply here
- Not all packages can be easily modified or enhanced
- Modifications (and likely the original package) will probably not be supported by the package manufacturer
- When a new version of the package is available, the modifications will probably have to be recreated in the updated package software
- Features that modifications depended upon may not be available in newer versions of the package
An expert assessment is essential before pursuing this option. I am familiar with one company that spent a small fortune on a software system designed for wineries, and proceeded to modify it for use in a life science application. Years of work were needed to adapt the application with relatively simple additional functionality. If a consultant had assessed the package prior to its acquisition, the magnitude of the package's shortcomings would have been known, and perhaps a different decision would have been made.
On the other hand, a package that serves more as a framework, and is designed to be customized, can serve as a cost-saving and time-saving shortcut. An application such as Microsoft SharePoint provides tremendous functionality that eliminates the need for development, yet it can be customized if necessary to better fit a company's needs.
Pay Now or Pay Later
Whether you choose to build, buy, or customize should be an educated choice based on a careful evaluation of your needs, the cost of the various options, and the anticipated benefits of each. I have worked with many companies who are not very good at this potentially complex endeavor. Work with an experienced consultant, and avoid the nightmarish problems that can come from one bad initial decision.
Have you ever had a COTS nightmare, or a custom-built success? Leave a comment – I would love to hear your story.