Have you ever heard the joke about the IT leader who lost her job because she purchased off-the-shelf software? No? Me neither. How about the one about users hating their job after their company purchased off-the-shelf software? Unfortunately, I’ve heard that one a lot, and it’s not a joke.
As many IT leaders will tell you, the decision to buy off-the-shelf software or build a custom solution can be fraught with anxiety. It’s a common question inspiring plenty of strong opinions.
Some people always purchase software because they believe buying off the shelf reduces risk — even if that decision means paying for features they will never use. Others have vowed to build custom software despite the time commitment. They’ve often had to rein in macro-filled spreadsheets and FileMaker Pro databases built to subvert processes that off-the-shelf software can’t accommodate.
Extension Engine’s answer to the question of “buy or build?” is: it depends. We’re not being coy. What does it depend on? We ask our clients the following six questions, many of which raise other questions to help steer decision making.
1. Is learning your primary business offering?
In general, no one should ever build their own accounting software or HR software. Custom software is unnecessary for well-established business practices found in every company around the world. For example, if your company needs to provide compliance training for employees, an off-the-shelf solution will work perfectly.
Only groundbreaking experiences are worth the time and effort required to build a custom solution. Absent any compelling reasons emerging from these questions, if learning is something your organization only does to support other primary activities, buy an off-the-shelf solution.
2. How interactive is your learning?
If the majority of your learning content is video and text delivered asynchronously or synchronous content led by an instructor, there are plenty of existing solutions to meet your needs.
However, if you are looking to mix synchronous and asynchronous activities like team projects and activities, an off-the-shelf solution will probably not offer the flexibility and creativity you need. To support a novel asynchronous or hybrid pedagogical approach, or engage learners with bespoke hands-on interactive activities and simulations, go for a custom platform.
3. What is your business model and competitive landscape?
The operational side of your learning experience and how you remain competitive affect your decision in several ways.
Once you know your business model and pricing, ask yourself the following questions:
- Can your business model support the initial investment of custom software?
- Can it support contracts for updates, maintenance, and security patches?
- Can you afford an increase in licensing fees as you scale?
- If your funding comes from an external source such as a foundation or board, do they have any expectations about software?
Once you research your competitive landscape, you should ask:
- Will you need to rapidly change direction and pursue new avenues of learning and interaction to meet market demand and keep up with competitive offerings?
- Will you learn from your users and adjust your offerings?
Answers to these questions can help you determine whether buying or building will be more financially advantageous.
4. How entrenched are your internal processes?
When purchasing an off-the-shelf solution, you’re agreeing to adapt your business processes to ones defined by the software. This includes everything from marketing to admissions and enrollment. You need to ask if the people in your organization are truly willing to adjust their work according to the software you purchased. If you have that level of buy-in from staff, consider off-the-shelf solutions. If your processes are the differentiating attributes of your organization, look into custom software.
Whatever you do, don’t answer this question alone. Talk to primary users and business owners. Make sure they understand how an off-the-shelf solution will affect internal processes. Can staff accept these changes to their work as reasonable trade-offs? Or will they resist the limitations of an off-the-shelf system as the tail wagging the dog?
5. How many integrations to other systems will your system need to support?
You might think buying off the shelf dodges the custom development bullet. Don’t be fooled.
Your learning system will fit into an ecosystem of applications that might include an SIS, CRM, help desk, and marketing automation. Two types of integrations exist between these systems. Manual integrations involve downloading data (typically as a .csv) from one system, scrubbing that data, and then uploading it to another system. These integrations may be viable in the short term while you test and perfect processes, but they should be gradually automated to prevent burning out system users.
Multiple automated integrations can be tricky. Despite standardization of interaction protocols, managing integrations between systems can feel like battling a Hydra. Each system will need to be upgraded at some point, require testing, and in worst case scenarios, need code changes.
For many organizations, “buy” actually means “buy and then build.” Be realistic about how much you really want to avoid custom development.
6. Do you have the internal capacity and time to create something new?
Partnering with a learning firm to design and develop your own learning solution is a rewarding yet demanding task. You will be consulted, asked to brainstorm, forced to make tradeoffs, and approve everything from project charters through test scripts to UI designs. You’ll need a strong project lead within your own organization to manage the process, which often includes managing internal politics. If building a solution is a priority for your organization, and you are ready to dig in and build something exciting, consider a custom solution.
It Really Does Depend!
These questions aren't meant to be a quiz where you answer each question and tally up your score. They’re intended to help you consider the decision from a variety of angles and ultimately choose what is best for your organization.
Your organization’s offerings, needs, business model, integrations, and other considerations can and should shape every aspect of the decision. This challenge can be an opportunity for strategic thinking and advancement.
