Build vs. buy software: Balancing cost and customization

Are you weighing whether you should build vs. buy a software analytics platform? Business and technical leaders face a tough decision to either shell out for an existing solution or invest time and effort into developing a custom one in-house. 

It boils down to balancing budget constraints with team-specific needs. Buying off-the-shelf software offers quick deployment and a proven track record, but building internally allows you to tailor it to the unique workflows and needs of your development team. It's a matter of weighing upfront costs against the pros and cons of each approach.

In this post, we’ll walk you through the advantages and disadvantages of building vs. buying software analytics platforms and tips to help you determine which approach is best for you.

Table of contents:

• What does it mean to build vs. buy?
• The benefits of buying new software
• The trade-offs of buying new software
• The benefits of building software
• The trade-offs of building software
• Determining build vs. buy for your team

When it comes to software analytics platforms, many businesses have to choose whether to build vs. buy—either develop custom software in-house or opt for a pre-built software solution from an external vendor.

It's like deciding whether to make a cake from scratch or buy a ready-made cake from a bakery. Each option has its own advantages, and understanding the implications of building or buying is key to making the right choice for your business needs.

For software development teams, building their own is typically the go-to answer whenever there’s a need. However, doing so can come at a cost to your internal resources. Whether it be time, money, or team bandwidth, you’re left with the decision to possibly exhaust your resources or find a software analytics platform that’s readily available and meets your needs.

If efficiency, cost-effectiveness, and quick implementation are priorities, buying new software might be your best choice. Purchasing existing analytics tools usually means lower upfront costs and faster deployment than in-house development. It's a great option if you lack the expertise for custom software or if your in-house team is stretched thin. 

Opting to buy new software rather than building it in-house provides an advantage in terms of time and cost. Off-the-shelf analytics platforms come with pre-built features, like team performance metrics and predictive analytics, ultimately reducing development time and associated expenses.

With lower upfront costs and quicker implementation timelines, businesses can realize immediate benefits and avoid the lengthy development cycles inherent in creating software analytics platforms from scratch.

Buying new software gives you access to the expertise of established software vendors. These vendors specialize in creating and maintaining software analytics solutions, providing a level of knowledge and experience that may not be available in-house. 

This is particularly advantageous if your company lacks specific technical skills or faces resource constraints, as it ensures the software is developed and supported by engineering leaders with a deep understanding of the technology and development lifecycles.

One of the key benefits of purchasing new software is the transfer of maintenance and support responsibilities to the software vendor. This offloads the burden from your organization as the vendor takes on tasks like updates, bug fixes, and user support. Something you wouldn’t have when building your own solution. 

Purchasing a good software analytics platform like Pluralsight Flow also means you get tailored deployment and onboarding support—helping to quickly train your team so you can quickly access the metrics and tools needed to improve workflows. 

Buying analytics software not only frees up internal resources but ensures the software remains up-to-date and well-supported, contributing to long-term stability. Businesses can focus on their core operations without needing an extensive in-house support team, streamlining ongoing software management.

While buying software offers efficiency and cost-effectiveness, there may be a few trade-offs to consider. 

If you’re in need of a software that has highly specific requirements tailored to your business operations, buying software might present limitations. While off-the-shelf solutions offer standard features, they may not fully align with your unique workflows or demands.

While not always the case, off-the-shelf alternatives may struggle to integrate seamlessly with the tools your team is already using, like Github or ADO, potentially making custom software the better option for precise integration in such cases.

While relying on a vendor for support and maintenance can be advantageous, it can also pose risks if the vendor is unreliable. Purchasing software means depending on the vendor for updates, support, and maintenance, which may not always meet your expectations or adhere to your timelines. However, you can mitigate these risks by selecting a reputable vendor and establishing clear expectations from the outset.

If you need a unique solution tailored to specific requirements, then you might consider building a software analytics tool rather than buying it. Building your own tool will give you a higher level of customization and more control. 

Building your own software provides unmatched customization, allowing you to tailor it to your organization’s unique needs. For example, you can integrate DORA metrics or other productivity metrics that align with your development methodologies. Off-the-shelf platforms may not offer specific features tailored to your team’s workflows, so a custom solution may be a good option.

Building new software grants you greater control throughout the development process, from design to deployment. This level of control provides better flexibility for scaling and evolving the system, which is particularly beneficial for businesses expecting substantial growth.

For industries with strict security or regulatory needs, custom analytics software provides greater control over security and compliance, minimizing risks tied to some third-party solutions.

When seamless integration with existing systems and technologies is essential, building custom software ensures compatibility and can eliminate potential issues related to integrating third-party solutions. 

While building new software has its advantages, it's important to think about potential challenges. You’ll need to carefully balance these factors to find the best way to meet your software needs.

Developing custom software typically involves a higher upfront cost. This includes expenses related to hiring skilled developers and designers, as well as investments in infrastructure, tools, and technology. 

Unlike off-the-shelf solutions, where costs are relatively predictable, building new software often requires more resources upfront to initiate the development process.

Creating software from scratch generally takes longer than implementing pre-existing software packages. The development timeline can be extended due to various factors, such as the complexity of the project, the need for extensive customization, and unforeseen challenges encountered during the development process. 

Once the custom software is implemented, it's not the end of the road. There's ongoing maintenance that will require your team's time and IT budget and future costs are never reliably known.. This could include tasks like debugging, updating, and enhancing the software to address evolving business needs.

Failure to allocate resources for ongoing maintenance can lead to issues such as software vulnerabilities, performance degradation, and compatibility issues with other systems.

Determining whether to build or buy new analytics software requires a thoughtful evaluation that’s unique and personal to your team's needs. Here's a step-by-step guide to help you make this decision:

Identify your team's specific needs and requirements. What problems are you trying to solve? What metrics are most important for you to track? What goals do you aim to achieve with the new software? 

If your team's needs align closely with available commercial options, purchasing software may be a cost-effective and time-efficient choice. However, if your requirements are highly specialized, involve intricate workflows, or demand a tailored solution to address specific challenges, building custom software may be a better option.

Make sure you thoroughly research and evaluate existing analytics solutions on the market. Identify off-the-shelf products that closely align with your team's requirements and goals. Here are a few things to consider:

• Features: Assess whether the software offers the features and functionality your team needs.

• Ease of use: Evaluate the software's interface, intuitiveness, and ease of navigation. Consider whether it requires extensive training for your team to use effectively or if it comes with onboarding and training support. 

• Customer service and support: Research the vendor's reputation for reliability, customer support, and ongoing maintenance.

• Scalability: Check if the software can grow with your organization. Look at things like user capacity, storage, and customization limitations as your needs change.

• Security: Assess software security and compliance with industry regulations. Look for features like encryption, access controls, and certifications to protect sensitive data.

• Integration capabilities: Check whether the software integrates smoothly with your existing systems and tools. 

• Cost and licensing: Consider all costs involved, such as upfront fees, recurring charges, implementation, training, and support. Compare pricing models like subscription vs. perpetual licensing to see which fits your budget.

This evaluation phase helps you understand the available functionalities, assess how well they align with your team's goals, and determine if customization is feasible within existing solutions.

Consider urgency when deciding between building or buying your software. If all you need is a quick solution, purchasing existing software can offer faster deployment than in-house development. Some platforms, like Flow, offer deployment and onboarding support, providing a quick and seamless setup and ensuring your team is up to speed on how to incorporate the platform into their workflows.

While your near-term timeline is important, you also need to be in alignment with your long-term strategy. Consider whether the software is a core aspect of your business that demands ongoing customization and control. Evaluating the software's role in your organization's plans ensures that the chosen solution supports growth and adapts to changing needs.

Assessing the level of customization needed is pivotal in the decision-making process. If your team needs highly specialized features not available in existing solutions, building custom software may be the better option. 

For instance, dev teams developing cutting-edge technologies may require custom software to support their research, development, and testing efforts. Building software allows your team to tailor every aspect to meet unique needs, ensuring a seamless fit with existing workflows and needs. But if an existing tool is customizable enough to meet most of your needs, it might be faster and easier to adapt your own processes to the tool. 

Consider your team's expertise in software development when deciding whether to build vs. buy. Building in-house may be more feasible and cost-effective if you have a skilled development team with the necessary capabilities. 

Conversely, if your team lacks the technical skills required for custom development, purchasing off-the-shelf software eliminates the need for extensive in-house development resources. 

Assessing the scalability of both options is crucial to accommodate your team's evolving needs. Consider whether the solution can grow seamlessly as your team expands or your business requirements change.

If scalability is a priority, building custom software provides the flexibility to adapt and scale with organizational needs. However, some software analytics solutions on the market, like Flow, give you visibility into your engineering team’s work patterns and performance, allowing you to make data-driven decisions on how to scale your business.

A thorough analysis of costs and risks is essential when deciding on building vs buying software. Compare the costs of building custom solutions, including development, maintenance, and support, compared to purchasing a solution. Make sure you consider hidden costs like training, integration, and scalability.

For instance, building custom software could lead to higher costs and time investments to stay ahead of evolving technologies. Purchasing software may limit your ability to scale as rapidly as needed.

Simultaneously, assess risks such as vendor dependencies and potential obsolescence. Custom solutions may require more resources to stay current, while purchased software could limit scalability.

A comprehensive cost and risk analysis ensures the chosen approach aligns with risk tolerance levels and supports sustainable strategic goals.

Evaluating whether you want to build vs. buy your development analytics software is an important decision. While each option has its own set of advantages, understanding the implications of both is important for making the right choice for your business needs.

If your team wants to deliver higher-quality software and solutions faster, consider Pluralsight Flow. Our tool is designed to provide actionable insights into your development process and comes with expert deployment assistance, customer success alignment, and guidance on embedding data within your workflows to help you get the most out of the tool from day one. 

Contact us to learn more about how Flow can help your team today.