Whether you’re in need of new fulfillment software or a system for your call center, you’ll likely have a choice to make between a packaged software system and custom-created solutions that you develop in-house, with or without expert help.
What determines whether to purchase packaged software or to pursue developing systems internally?
Both possible avenues start with the same information-gathering processes:
- Form a project team from the applicable departments the system(s) will affect, including a member from top management; this person will act as the project sponsor.
- Appoint a steering committee to meet and review the project on a periodic basis.
- Formulate an RFP from the requirements determined by the members of the project team.
- Develop costs for internal development from the same requirements.
- Determine the percent fit from the RFP responses.
- Compare vendor costs to in-house development costs to reach your conclusion.
In some instances, packaged software may be just the solution your company needs. But large companies looking to move away from legacy systems often find that packaged software doesn’t meet 80 percent of their requirements, as they may have developed many unique features to support their business requirements.
What happens when the vendor responses don’t meet at least 80 percent of your requirements? Then, modifications are needed to the vendor’s package. It is important to recognize that modifications equal additional costs and risks, extended timeframes to implement, additional testing, documenting and training, etc. When this occurs, the cost of the off-the-shelf, packaged software solution is likely to increase, so take this possibility into account when making your cost comparison.
Why doesn’t the user community of the packaged software vendors push to have more functionality?
- Vendors may have limited development staff.
- Vendors may not have the depth of experience to understand the new functionality and need assistance from their user community.
- Time and cost to develop may exceed what the vendor is willing to commit to.
When packaged software vendors can’t meet your company’s needs the alternative is to continue to develop in-house. This presents a different set of opportunities and challenges:
- Internal development and maintenance costs and time frames can be difficult to project.
- Is the legacy system written in an outdated language?
- Does your staff have broad enough industry knowledge to know best practices? Are there development personnel who understand the current system processes and the new requirements in order to effectively develop the modifications?
- Documentation (both system and user) is usually put off until after the modifications are completed and then may not get done as the analysts and programmers are off on the next assignment. Without documentation any modification becomes difficult to maintain especially when the original designer/developer is no longer employed at the company.
An added challenge to developing your own software is it doesn’t allow you to take advantage of the input from the vendors’ user committee, who, hopefully, is guiding the direction of new functionality. Advice from other users can be very enlightening in deciding where to take the software to the next levels.
Decision Time
In the end you will need to develop a game plan that works best for your company whether you are developing your own systems or selecting and installing packaged software.
