Building in-house software comes with costs and risks.
Is it better to build or buy software? The prevailing wisdom is that building software has more advantages. If the project can justify development resources, such as for infrastructure and expert skills, the value far outweighs the risks.
But this belief doesn’t translate into reality. A new report: Build vs. buy: The true cost of DIY IT solutions, from e-mail signature management solution provider Exclaimer, reveals that building in-house software comes with far more costs and risks, with 71% of such projects being abandoned.
“IT and business teams often consider in-house software and services as more secure and under their control,” says Paul Cox, Regional Channel Manager at Exclaimer. “But the results from our surveys uncover a very different picture, where it is often more sensible to consider established software solutions before trying to build something internally.”
In-house software’s risks
Why is building software an attractive option? Senior IT managers and executives provided several reasons, including more control, greater efficiency and the capacity to customise. Some regard it as the best solution for compliance and data residency requirements, while others use it to support legacy systems.
These reasons are valid and even necessary in some scenarios. Yet most of the time, they create a false sense of control and efficiency that fades as maintenance demands, compliance risks and long-term costs grow, what Exclaimer calls a “DIY mirage”.
“In-house software requires a lot of maintenance and management. It often leads to operational scope creep that slowly consumes more time and resources. Supporters of this model say they want control and customisation, but more often they increase their overheads and downtime.”
Exclaimer’s report highlights such concerns. According to the IT professionals it surveyed:
- In-house software downtime varies between 50% and 74%.
- Over 50% of in-house projects take 1.6 to two times longer than planned.
- Forty-six percent of in-house projects cost twice their planned budgets.
- Sixty-four percent of in-house projects cause security issues.
- Thirty-one percent experienced compliance and data protection barriers.
Nor do these in-house deliverables last. In heavily regulated industries like finance and manufacturing, companies eventually abandon 83% of internally built tools.
These figures don’t aim to disparage in-house developed software. But they outline a big contrast between expected value and hidden risks. For many use cases, in-house software may not be an effective and worthwhile investment.
Decision-makers are increasingly aware of the trade-offs between impact and ROI when building their own solutions in-house. At the same time, modern software services provide compelling alternatives offering flexibility and control through software platforms, managed services and specialist support, particularly for complex and high-risk areas such as compliance. As a result, IT leaders are shifting towards partnering with specialist vendors and choosing to buy rather than building software. According to the report, speed (30%), access to expertise (29%) and reliability (28%) are the key drivers.
Yet, buying software isn’t a guarantee of success. Buyers rely on good vendor and channel relationships to get what they need. While this is an opportunity for software solution and service providers, the emphasis on buy also distinguishes IT channel leaders from followers.
“Channel companies such as managed service providers and system integrators must focus on building good relationships with their clients, backed with the right software and skills. The takeaway from this report isn’t about building versus buying software, but that the market is more open to buying if it includes specialist insight, value-based strategies and customisable systems. Channel companies that invest in the right services and skills will win the most business,” says Cox.
The right skills and software can vary from embracing specific hyper-scale cloud providers to turnkey services that are quick to deploy and adapt into a customer environment, such as Exclaimer’s e-mail signature management platform.
Such services enable companies to address compliance, security and productivity without the drawbacks of building those solutions in-house. As more companies emerge from the DIY mirage, they look for channel companies with the right skills and services to prove that buy is often better than build.
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