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Build vs Buy

Your business is growing. You have a need to implement an enterprise solution to support your business operations. What do you do? Where do you start?

The first question that business owners or leaders will ask themselves is “do we buy an off the shelf solution or do we commission a custom software build?” There are benefits and drawbacks to both approaches and there is no clear cut right answer.


In most cases, the cost for building a custom software package will be higher than purchasing an off the shelf solution (COTS solution). While there typically aren’t any licensing costs associated with a custom build, there is significant time (money) required for software developers, business analysts and project managers to design and build a software package to suit the specific needs of the business. Accurate estimating and diligent ROI analysis needs to be done as part of any software project business case for Buy or Build.


Depending on the organization size and line of business, there may or may not be a team of software developers in-house that can be commissioned to build the system. But that is just one piece of the puzzle. The real need for expertise doesn’t lie in the team writing the code but in the people making decisions on how the software will run (in both Buy and Build scenarios). Can these key business experts be seconded to a software project? If the company is truly committed to making the project a success, the answer needs to be yes.


There isn’t generally a rule of thumb when it comes to schedules for Buy vs. Build. I’ve seen COTS projects go far longer than what a parallel build project would take, and vice versa. The biggest impact to schedule is adequate planning, project resourcing and obviously solid project management.


Again, this doesn’t necessarily will indicate that one of Buy or Build will always yield better quality over the other. Choosing a reputable vendor (for Buy) with a solid product and track record is key. Having a competent software team (for Build) is also vital. Active involvement by business subject matter experts as well as project sponsorship will inevitably help increase the quality of the deliverables in the project.

When it comes to the Buy vs. Build question there is definitely not a ‘one size fits all’ solution. There are many organizations that have a hybrid portfolio of COTS and custom built solutions to meet the organizational business needs. As long as the software can prove a positive (or non-negative) ROI, provide the business with the required functionality and meet the schedule expectations of the business then it’s a successful project, regardless of who wrote or owns the code.

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