Enterprises who are considering building an in-house system must undergo a Cost Benefit Analysis.
Build?
High total cost of ownership and complexity associated with developing and maintaining a new system. We all understand the benefit of a system that is tailored to your own business processes, but often this requires a re-engineering of your total process. This can be a positive move for any business, however undergoing a change to your business process while you are trying to design develop and implement a new system is often beyond the financial capacity of most SME's (small to medium Size enterprises).
Custom-designed applications, will best fit your current business practices however it may not be the Best Business Practice. With Software Vendors they often incorporate Best Business Practices into their software, this gained from experiences they gain from all the different implementation of their Software. The Customer Base will suggest what they require and if the Software Vendor can see that this is beneficial to all of their Customer Base they will often implement the feature. This enables them to deliver the Generic Best Business Practices that supports the majority of Enterprises.
Finally you may find that your project will not be able to take advantage of the Rapidly changing technology, by the time you build it is it outdated. Software development may not be the core competency of your business, unless you intend to incorporate Software Development as part of your businesses Vertical processes, this cause of action could be problematic. It is estimated that more than 70 percent of internal software projects fail.
Buy?
You may ask yourself why existing businesses need to update or implement new systems? Hasn't the current system served us well. You know what they say if it isn't broke don't fix it. Well the reality is by the time an enterprise notices that the system is broke it is often too late and your competitors have gained the jump on you and then you find yourself in the position of having to invest far more money over a shorter period just to gain back lost ground. Remember a business is either incline or decline. If you think you are doing OK chances are your business is in decline based on the progress of your competitors.
Technically outdated and the ongoing redesign of the business process makes existing software functionally obsolete. So why don't we build it ourselves. There are many examples where an Enterprise is still using a system that was developed in the Early 90's and are not able to take advantage of new best practices because they are locked into the Software and the Vendor is maintaining this old system or has in fact disappeared.
It is true that Off-the-shelf solutions integrate the best business practices from a variety of companies, but that is only based on today's best business practices. With Vendor’ Software Maintenance, companies can stay with the latest functions and technology at fractions of cost of developing their own.
Rent?
There are many arguments that SaaS (Software as a service) is the most cost effective solutions for SME's. This may be true in many cases, so it is important to find a Solution that can provide this as a choice. The main argument I hear from most business owners and management is that SaaS is difficult to customise and they are concerned that the very valuable mission critical data is locked in with a software vendor, and what may appear to be cost effective today may not be so in 5 years time. How much are you prepared to pay to access your data that is the life blood of your business.
Is SaaS Cheaper Than Licensed Software?
Customise?
The reality unless you utilise an Industry Specific Package, there will always be that lingering question "if only the system could do...". Even with industry specific solutions there will always be the need to make changes specific to your business. This is why when you buy an off-the-shelf product you have some minimum questions to ask;
- Does the software have an API, is it well documented?
- Is the Software written in a computer language that is familiar to many developers?
- Are there examples of successful Customisation's that other Enterprises have completed?
- Is the Software Vendor of Sufficient size, that they will be around in 5 years? If not is the Source Code available for Sale or Lodged in Escrow?
- Is the UI user friendly and familiar so as to reduce training requirements?
- Is there a pool of developers that have worked on the software independently and services are available to the open market?
- Are the developers experienced and reasonably priced?
- Are the developers able to give you an estimate of time for projects? or do they just quote you an Hourly Rate?
Conclusion
Finally any software solution will fail without 2 key components, which are;
- That all Stake Holders are involved in the evaluation processes and agree that the enterprise requires an eBusiness Solution to assist with the improvement to their business processes.
- Throughout the implementation and the Go-live period, that all users receive adequate and appropriate training. You can have the best system in the world, but if no one knows how to effectively use it, the system will become an expensive failure
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