Homemade is not always better than bought. In the case of software solutions, this is true at least when more affordable third-party solutions meet the needs of the company and a customised solution does not offer much potential for differentiation from the competition.
Sooner or later, every entrepreneur or managing director inevitably finds himself in a classic “make-or-buy” dilemma. In the case of corporate digitisation, the decision is mainly between customised software and third-party software. Combinations are also possible and often represent the best and most efficient solution, especially for SMEs.
A large part of the processes is the same in all companies. Therefore, the decision for a customised software should be well considered, as it only makes sense if a software adapted to the individual needs and processes of the company offers potential for a competitive advantage. For everyday processes such as time recording, payroll and HR, the market offers numerous fully integrated thid-party solutions that satisfy the basic needs of almost every company. Third-party software is more affordable, can be implemented more quickly and, if necessary, integrated with individual solutions via interfaces. However, caution is advised when it comes to costs: Many fully integrated ERP software such as SAP are very extensive and often not worthwhile for small businesses because only a small part of the functions is actually used. Thorough research with possible consultation is recommended to avoid disproportionate costs.
Whether an individual solution is the better way, must be determined individually. The following criteria can serve as a guide in this decision.
Individual software is recommended when:
– The company processes represent a competitive advantage and should therefore be mirrored by the software.
– Extremely complex and individual processes are to be digitised and the standard software cannot be adequately adapted.
– The existing systems are not compatible with standard software.
– The digitisation involves more complex, customer-oriented processes.
Standard software is recommended when:
– The company is very limited in terms of know-how, budget and/or time.
– The deviation from the standard process does not offer any potential for differentiation from competitors.
– The digitisation involves standard processes such as accounting, wage payments, etc.
– The risk-benefit analysis is clearly in favour of standard software.
In most cases, it is worthwhile to use integrated third-party software for standard processes and to supplement this with further software of this kind or individual solutions, depending on the company’s goals and needs. Individual development usually brings the greatest competitive advantage in the area of customer and service provision processes, as it is a possibility to stand out significantly from competitors. In addition, individual solutions are more flexible and thus improve the agility of the company regarding future adjustments.