Build your own software: Why not? or Why not.
There is a slim difference between a period and a question mark; one raises a question, and the other suggests an answer. But is it so? Should you build your own software? The answer (my answer) is probably no, but in fact it’s a little bit more complex than just that, and this probably touches on more aspects of the business than you may think.
I once worked for an event organizer, where of course events represented the core of the activity. The company was running on premise event management software. As it became dated, it was clear that we needed to revamp the solution to better serve our clients’ needs.
Cloud vs On Premise
In simple words, on premise means the software is installed and hosted in one of the company’s servers, with restricted and limited access to/from the outside. The instance is often specific to the company. Whereas Cloud/Saas is the same instance for all clients, hosted on an “internet server” where each company and users have online access to it.
At that time, we were in an “in-between” mode. The software had been customized year after year, making the product dated, patched and barely manageable. It was hosted in a small room within the company’s building and maintained by a couple of IT guys. The technology was not internet (SaaS/Cloud) based. Each event needed to physically install a copy of the program on a server and then ship the server onsite!
You may think it is crazy, but this was only 5 years ago. In the late 2000s, this technology was pretty top-notch compared to manual processes and emails. The few internet ready functionalities even allowed people to register online! yeeahh.
When thinking about the next phase of technology for the company, we were between two options: internet (SaaS/Cloud) versus on premise. The option for a cloud server was obvious, no real struggle in decision here. However, because events were so core to the business, and after looking at several online event management platforms, some people in the company thought: should we build our own?
The ICEBERG graph: Differences between SaaS and on premise software
We Are Managing Events
When events are the core of your business and the volume is substantial, you need to look for an event management solution. Here is one of the most common remarks you can get internally when you bring internet versus on premise solutions to your company. “The platforms we looked at were certainly great, but they only addressed 90% of our needs. Also, they are not built for our processes, which would induce a lot of changes in our approach.”
You also could have a very ambitious team: “We can build our own software, geared toward our processes and meeting 110% of our needs.” The next few phrases you start to hear are, “Yeeahh! Let’s build it! This sounds great! It’s a no brainer! Also, we are going to have a fantastic advantage against our competitors, those losers!”
Eventually, there’s a troublemaker that comes with couple of questions like:
- Ok, when is this going to be ready?
- Weren’t we looking to modernize our process anyway?
- What would be the cost, not just of the project, but the lifetime cost?
- Wouldn’t we be stuck with the technology for years, with limitations to pivot?
- Are we a tech company, I mean do we hire developers and software architects now? Shouldn’t we focus on doing great events?
- Is a 10% gap in functionality and fear for change management enough to pursue the in-house option?
These are obviously valid points, but I still see some cases were companies are not able to raise these questions and provide a reasonable answer. Also, not being a tech company creates a gap between the analysis and the reality where lots of aspects are not adequately anticipated.
On paper it takes 14 months, in reality it takes 24, 30 months if not more. As you build the tool, users will trigger new ideas and internal politics will create slowness or lack of focus. Groups are torn apart, the new software doesn’t serve a strategy, and internal resources are being pointed.
I cannot count the number of failures I saw, from a resource management stand point as well as from an execution standpoint. The task is huge: coding, support, architecture, innovation, robustness, security and more. There are so many components in a platform, which makes it really hard, even for large groups, to compete with what a software company can provide and deliver – given the software is their primary and only focus.
Now, It’s Time to Build Your Software
What? Didn’t you just say it was a mistake? Yes I did. But my take is that lots of platforms are very flexible, to the point where an organization should allocate new and skilled resources to build more than the software itself: they need to build the right ecosystem.
Software, internal or outsourced, cannot and should not live in silo. Data needs to flow (accounting, CRM, marketing, event) from one tool to another. So don’t worry, if you have a desire to build your own, this is where you can (and should) play. This is what brings you to the next step to elevate your company both in terms of productivity and offer. Putting the resources in building links in the ecosystem, either from a technical management standpoint to (sometimes) execution is totally relevant: there is so much value in connecting all the pieces of the puzzle according to your macro process.
What matters is not the software itself, but how you link all the software together. And yes, to answer our troublemaker’s questions from above: change management is going to happen. Make sure it’s geared toward your goal and your know-how. Some choices can be very expensive, not just because projects get delayed in rolling out, but also because of the dispersion they create against core business.
What Does SaaS Software Bring to the Table?
A cloud/SaaS software is certainly not built to meet 100% of YOUR goals, and it will require adapting some of your processes (AKA, “we always did it like this”), but you will remove a bully from your organization and likely address the core 90+% you need. In 2015, this kind of software is super secure (of course still have your IT team do a background check), but very large organizations likes banks, insurance and tech companies working with event management software have checked! Also remember that bandwidth, integrations, support and more are the core focuses of these companies. They are here to help you achieve your goals.
If by any chance something goes wrong, which is unlikely, you can pivot and replace the component that is not working in your ecosystem/workflow. (Try that with an internal team)
But one of the biggest benefits with Cloud/SaaS software is that hundreds of other clients are bringing innovation, ideas and value that you can leverage.
Will you differentiate yourself from your competitor? Yes, by using the ecosystems properly and building the right chain of value. Van Gogh had only paint and brushes. He did just great with it!
Nicola Rosetti - eTouches