When should you buy time and expense tracking software and when should you build it yourself? It’s tempting, when you have developers and smart information technology people working in your company, it’s very tempting to want to build things instead of buy them. Maybe you’re a do-it-yourself person. But here’s the thing: sometimes it’s probably a good idea for you to do that and sometimes it’s not.
Let’s start with a little bit of calculation. Let’s say you come up with some sort of estimate for how long it’s going to take for you to write your own time and expense tracking software product. First of all, you know there are some advantages. You’re going to get exactly what you want, because you’re building it and you know what your requirements are, and you’re going to get that thing built and it’s going to be perfect, it’s going to be just for you, exactly the way you want it, integrated with all your systems and all your people are going to love it. Now how much is it going to cost you? There’s an opportunity cost, too, remember. This developer that you’ve got writing this stuff could’ve been doing something else that’s maybe more in the core business…the core thing that your company can do. But here’s where the real problem comes in is maintaining the software over time. So you’ve got this person who wrote this software (maybe it was you) and ten years from now your company’s doing really well…and that guy quits, or maybe he gets a job somewhere else. Who’s going to maintain that software now?
The advantage of working with a software company that’s in the business of doing nothing but that is you have a better chance of them being ahead of the curve on that and making that happen. So how long are you going to have to maintain this thing and who’s going to do that?
And then there’s the problem of you’re going to go buy some software from a software vendor (and this goes for any kind of software) and they say we have zillions of clients, we have eight billion customers all over the world – they all love our software. It’s the best thing in the universe. Here’s how you find out if that’s true: if they really have a million customers, they probably have one right down the street from you, so you should say “I’d like to talk to the one in my zip code, please.” So that’s one way.
And then another question I think I have here is can you do a hybrid model. Are you sure that it’s cheaper to write the software from scratch and maintain it over time? Now it’ll be to your specifications, and that’s good news, but you’re going to have to maintain it forever, and that’s kind of bad news. But the advantage is you’re getting what you want. The disadvantage is, you have to own it and take care of it.
You’re going to build your own time tracking app, or you’re going to buy a time tracking app. You want to do an estimate of how much it’s going to cost to build that or how much it’s going to cost to buy that and roll it out, and then, for the next five or ten years, how much it’s going to cost per year to maintain that. Careful about overestimating your internal capabilities, but also be careful about overestimating the stability and capabilities of the vendor you might be doing business with.