Build vs. Buy: Important Decision in Software Development

Build vs Buy is a critical decision a company must make when developing new software. Should they build the software from scratch or buy an off-the-shelf solution? Each option has advantages and disadvantages, and choosing the right approach can have significant implications for the success of the project and the company’s bottom line. Although according to a survey by Forrester Research, only 7% of businesses prefer to buy their software.

This article will explore the key factors to consider when making the build vs. buy decision for software. It will also provide insights into the pros and cons of each option and offer practical advice on evaluating your organization’s needs and making an informed decision.

Build Vs. Buy Software: 7 Considerations To Do

When considering whether to build or buy software, there are several important factors to take into account:

1. Technology Platform: Compatibility and Flexibility

Technology platform compatibility and flexibility are essential when considering whether to build or buy the software. If you decide to buy off-the-shelf software, you must ensure that it is compatible with your existing technology infrastructure and can integrate with any other software tools you use. It would be best if you also considered the flexibility of the software, ensuring that it can adapt to any future changes or upgrades to your technology environment.

If you choose to develop your software, you must ensure it is compatible with your existing technology infrastructure, such as servers, databases, and other software tools. Additionally, you must ensure it is flexible enough to integrate with future technology changes or upgrades. You may need additional tools or resources to provide your software that can adapt to changing technology requirements.

Regarding building custom software, a study by the Standish Group found that projects using a flexible development methodology, such as Agile, were twice as likely to succeed as those using a rigid methodology. Agile development allows for greater flexibility and adaptability to changes in technology requirements. Building software will let you design it as per your needs and provide optimum satisfaction.

2. Product development

While determining whether to build or buy software, product development is critical. If you acquire off-the-shelf software, the product development process is already complete. It means you can focus on modifying and integrating the software to match your business objectives instead of spending time and resources on product development.

If you decide to create your software, you must devote substantial resources and experience to the product development process. This comprises software strategy, design, development, testing, and deployment. You must also check that the software fits your business needs and any regulatory and security standards.

Usually, when determining whether to build or acquire software, product development is a crucial factor to consider. Depending on your business requirements, building software that meets your needs may be more efficient.

3. Opportunity Cost

Source: Chisel

Assume you opt to purchase off-the-shelf software. In that instance, opportunity costs may be associated with lost potential benefits or competitive advantages acquired by designing custom software that better suits your business objectives. But if you design your software, the outcome will be more effective and efficient as custom software is more personalized and created per your needs.

Ultimately, assessing the opportunity costs of developing or purchasing software against each alternative’s potential benefits and drawbacks is critical. This can assist you in making an informed decision about which method is ideal for your company’s needs and objectives, as well as ensuring that you are maximizing your available resources and prospects.

4. Monetary cost

Source: TechRepublic

Monetary cost is essential when deciding whether to build or buy the software. Buying off-the-shelf software may involve lower upfront costs, as the software has already been developed and is ready for use. However, additional costs may be associated with customization, integration, and ongoing maintenance and support. It is essential to carefully evaluate both options’ total cost of ownership, considering factors such as development time, ongoing maintenance and support costs, and potential cost savings from using an existing solution rather than building from scratch.

On the other hand, building software from scratch may involve higher upfront costs but can provide long-term cost savings and benefits. Custom software can be designed to meet the organization’s specific needs, reducing inefficiencies and streamlining workflows. This can result in increased productivity and profitability, ultimately offsetting the initial investment in building the software. As per studies, 56% of the companies have experienced a higher degree of regret for their larger tech-related purchases like software, computers, etc.

The average cost of software development ranges from $50000 to $250000, and the hourly charges for software development in India are around $18 – $25. Hence outsourcing IT solutions from an India-based company like Pirimid Fintech would be more efficient and profitable. The company has extensive experience in capital markets across multiple asset classes, including execution and order management, low latency trading, risk and compliance management, business intelligence, etc.

5. Security

To safeguard your organization’s data and sensitive information, you must build your program to fulfill strict security standards. This can be a complicated process that necessitates a large amount of experience and resources.

Before purchasing off-the-shelf software, please ensure it meets your security requirements and industry standards. It would help if you also confirmed that the manufacturer delivers regular updates and patches to address any security flaws that may be uncovered over time.

Ultimately, security is essential when determining whether to design or buy the software. All solutions necessitate a thorough analysis of security threats and appropriate mitigation measures.

6. Upgrades and support

Building software from scratch provides greater control over upgrades and support, as the organization has complete ownership and responsibility for the software’s ongoing maintenance and updates. This enables the organization to tailor upgrades and support to meet their specific needs and respond quickly to any issues or bugs that may arise.

In contrast, buying off-the-shelf software may involve relying on the vendor for upgrades and support, which can be a less flexible and responsive solution. The vendor may have priorities and timelines for upgrades and support, which may not align with the organization’s needs and timelines.

Furthermore, developing custom software allows for greater adaptability in responding to changing company needs and technological requirements. The company can make changes and upgrades to the software as needed without relying on the availability or approval of a third-party provider.

Overall, creating software from the ground up provides greater control, flexibility, and responsiveness in offering upgrades and support, making it an appealing alternative for enterprises with the necessary resources and skills.

7. Scalability

Regarding scalability, building your software gives you more control over the software’s growth and adaptability. By designing your software from scratch, you can ensure that it can handle rising usage, data volumes, and user demands. This allows you to customize and modify the software to meet your organization’s needs and future requirements without relying on external vendors or solutions.

In contrast, buying off-the-shelf software may limit your ability to customize or modify the software to meet your changing business needs over time. You may need to rely on the vendor to provide updates or additional features that may not align with your organization’s requirements.

Overall, while scalability is a crucial factor to consider when deciding whether to build or buy software, building software provides more control and flexibility over the software’s growth and adaptability in the long run.


In conclusion, while buying off-the-shelf software may provide more immediate solutions, it may lack the specific features or functionality your organization requires. While potentially costly and time-consuming, custom software development can offer more flexibility, control, and scalability in the long run.

Building software from scratch allows for more tailored solutions that adapt to changing business needs and technological advancements. It also allows for greater control over security and ongoing support and maintenance.

Ultimately, the decision to build or buy software should be based on a thorough evaluation of your organization’s unique needs, goals, and resources, considering factors such as total cost of ownership, scalability, security, and ongoing support and maintenance. But in the long run, building software will turn out to be comparatively more efficient and profitable.

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