To Build or to Buy? A Deep Dive into the Strategic Dilemma of Software Adoption

Is it wiser to sail the known seas with a pre-built vessel or to construct your own, tailored to every conceivable need and storm? Do you take the well-worn path through the forest, or forge a new one, bristling with unknown challenges and potential? In our digital age, organizations face a similar conundrum: to navigate the technological tides with purchased software or to cultivate their own digital forest through in-house development.

As companies stand at this crossroads, companies grapple with more than just financial trade-offs. The decision wields influence over organizational agility in a fluctuating market, impacts on internal resources and skills, and shapes the path of technological and strategic development. Consequently, a nuanced exploration of this critical choice and its far-reaching implications becomes imperative.

Some leaders may perceive in-house software development as a path to tailored solutions and strategic alignment with organizational needs. While this may be true in some cases, this approach is not devoid of challenges and pitfalls. In this exploration, we delve into the compelling reasons to opt for vendor solutions, illustrating with the case of a resource management platform.

The Intrinsic Benefits of Investing in External Software Solutions

You’re up and running in a few weeks vs months or years

Investing in a ready-made software solution significantly accelerates the timeline from decision to value. The reality is stark: a specialized software can be up and running within a few weeks, offering immediate utility and value.

This contrasts sharply with developing a solution in-house, a path often marred by extended timelines, spanning from several months to potentially years, before the system is fully operational. The latter scenario not only delays access to the benefits of the tool but also ties up valuable internal resources in development, testing, and implementation phases.

In essence, buying a solution allows organizations to rapidly harness the benefits of sophisticated software, ensuring that the focus remains on core business operations and strategy.

Get access to unique competitive and market insights that better inform your organization

Acquiring software can be likened to unlocking a vast library of market knowledge that goes beyond your organization’s internal data, and gives you a wider perspective on market trends, industry best-practices, and competitive landscapes.

With purchased software, you’re not just getting a tool; you’re gaining access to the cumulative insights derived from the provider’s broad client base and extensive market research. This means you can make more informed strategic decisions without having to conduct all of the research and data analysis yourself. Think of it as tapping into a collective intelligence, where the learnings from various organizations are distilled into insights and functionalities that you can leverage.

In a practical sense, this could mean identifying emerging customer needs quicker, pinpointing operational inefficiencies with greater accuracy, or even foreseeing market shifts with a clearer lens, all of which empower your organization to navigate through the commercial landscape with augmented wisdom and foresight.

The vendor is specialized in the specific need, like optimizing resources

Opting to utilize a specialized company for resource management software is essentially about harnessing expertise and innovation that has been refined over years.

These companies live and breathe software solutions, developing and iterating their products continuously to stay at the forefront of technological advancements. Unlike a generalist internal team, these firms focus entirely on creating and optimizing resource management tools, ensuring they are not just functional, but also incorporate the latest innovations and efficiencies.

In practical terms, employing their software means you’re implementing a tool that’s been tested, refined, and validated across a multitude of scenarios in various organizations. This ensures that your resource management is not just current, but also future-ready, allowing your business to implement proven strategies and technologies, thereby avoiding the common pitfalls and inefficiencies that may plague internally developed systems.

Keeping the software working and up to date is not your concern

Choosing to purchase software means handing off the responsibilities of maintenance and updates to experts who specialize in keeping the technology performing at its peak. You no longer have to allocate internal resources to troubleshoot issues, manage updates, or navigate the complexities of ongoing software management.

According to a Deloitte study, only 19% of IT expenditures are allocated toward new innovations, on average, while the remaining 81% is utilized for the maintenance and incremental improvement of existing tools and operations.

In tangible terms, this means your IT team can focus on initiatives that directly support and advance your core business objectives, rather than being sidetracked by software upkeep. Moreover, it guarantees that your tool is always up-to-date with the latest features and security patches, ensuring optimal performance and data protection without demanding your attention or resources.

In this context, you’re not just buying a tool; you’re investing in a service that ensures the sustainability and evolution of that tool, aligning it with your organizational needs and industry advancements without the hassles of management and maintenance.

You only pay a fractional part of what it costs to build the software

On average, large IT projects run 45 percent over budget and 7 percent over time, while delivering 56 percent less value than predicted. McKinsey-Oxford study

Investing in pre-built software is a strategic move that sidesteps the substantial financial outlay of building a solution in-house. Essentially, you’re leveraging the vendor’s scale and expertise at a fraction of the cost it would take to develop the software yourself.

The software company spreads the development and maintenance costs across all its customers, making the individual pricing for each client notably lower than if they were to undertake the entire project internally. This means you gain access to top-tier technology without bearing the full financial burden of its development, maintenance, and future upgrades.

Furthermore, this financial efficiency enables your organization to allocate budget to other strategic areas, ensuring that capital is used where it can generate the most value. In essence, you obtain a premium tool at a reduced cost, while also preserving your financial and human resources for other vital initiatives.

What are the challenges in running internal resource optimization tools?

1. Addressing Work Complexity

Navigating the intricacies of employee workload and understanding the nuanced variability of tasks are vital. This includes accurately estimating the difficulty and duration of work packages and identifying the subtle interconnections between skills, personnel, and successful outcomes.

2. Balancing Individual and Organizational Needs

Effective resourcing necessitates a keen understanding of individual contributions within the larger organizational strategy. Diverse stakeholders, while focusing on varied data and questions (“Can my country handle more work with available resources?”, “Where are our department’s resource bottlenecks?, How can I enhance my team’s performance?…), must collectively communicate and debate using unified data and understanding to cohesively drive the firm’s objectives.

3. Maintaining Data Quality

It’s always necessary to clean and prepare data. Resourcing data and the complexities of the real world are particularly prone to quality issues. This is where powerful filtering, data exploration, and underlying data modeling comes in. Building this in-house takes a lot of domain familiarity, and maintaining the system as resourcing efforts evolve is far from trivial. New sources, agencies, team members and recruiting efforts all act to continuously complicate the reporting landscape.

4. Efficient resource optimization requires real-time insights & monitoring

Adaptability to the dynamically shifting resource landscape — across human, technological, and financial dimensions — is crucial. The frequent alterations in project scopes, team allocations, and budgets make static plans obsolete quickly, necessitating real-time insights and monitoring for effective resource optimization.

5. Navigating Long-term Impact of Decisions

Comprehending the longitudinal implications of decisions like project postponements or order delays is vital, especially considering the external pressures from changing market and economic conditions. Spreadsheets falter in facilitating such nuanced analyses, highlighting the need for more sophisticated, automated tools for informed decision-making.


Navigating the crossroads of buying versus building software thrusts companies into a strategic dilemma, balancing adaptability, market competitiveness, and judicious resource utilization. The dichotomy demands meticulous analysis, contemplating not only immediate needs but also envisaging future scalability and evolution. Crafting a strategy that is both visionary and pragmatic may well be the linchpin of sustaining a competitive edge in an increasingly digitalized marketplace.