Build VS. Buy: Your Perfect Approach to Supply Chain Management Software
TL:DR: The topic of custom-built versus out-of-the-box software for supply chain management never loses relevancy. At its heart, the argument is about each company’s goals. Those who value speed and low maintenance, buy, while those who want maximized control, full customization or niche features splurge on building their own system. Regardless of your priorities, the choice of your software strategy should be informed by research and deep understanding of your processes.
To build, or not to build, that is the question. The calculations of potential gains and losses of creating logistics management software from scratch have boggled the minds of many supply chain executives. Innovecs has recently published a study of popular Supply Chain Management (SCM) software providers for those who are set on purchasing a prebuilt product. Today, we will analyze the latest data from our experts to see if creating your own solution can sometimes be a better idea.
THE BUILD/BUY DICHOTOMY, SUMMARIZED
A supply chain management system can make or break the success of your logistics. If something goes wrong, the effects can take months to recover. It is easy to understand how such a course-altering decision would leave the executives paralyzed or push them to go with big-name companies they heard about, instead of doing extensive research into specific needs of your logistics. That decision paralysis is exactly why we are here.
Benefits of Building
- Full control. You will pick and choose every “ingredient” of your supply chain management software, from its functionality to its overall user experience. Understanding your staff will come in handy here – if you have previously done an assessment of what kind of software your workers find easy to learn and user-friendly, this information can help in the development of technology with a gentle learning curve.
- Cost-efficiency. If you dictate everything that goes into your management system based on your company’s needs, you will only pay for the things you are sure to use, granting that no dollar is wasted. However, since you will provide your own support and updates, it is paramount to plan ahead and let your development team know of the features that your company may not need right now, but will make use of in the future.
- Customized features. Your company may provide some highly specific, or even innovative services that are rare in the industry. In that case, out-of-the-box software will be unable to consider these processes. Your fully customized management system, however, can factor in all of your services, however niche, and allow you to measure your deliverables in the areas a prebuilt solution would have left unattended.
Risks of Building
Developing a customized supply chain management system carries its own set of challenges. The development process can be lengthy and complex, leading to potential delays in implementation and increased costs. Maintenance and ongoing support can also be problematic, as custom systems may require specialized knowledge and resources, making them more costly to manage over time.
Both your company and the overall landscape of supply chain technology are sure to evolve. When that happens, custom solutions may become outdated and challenging to update or integrate with new software and hardware, posing risks to long-term scalability and adaptability. There is also the risk of vendor lock-in if the company relies heavily on a single developer or a small pool of expertise, limiting future options and potentially reducing competitiveness. Careful planning and risk mitigation should be the basis of your custom software development to ensure its long-term success.
Benefits of Buying
- Time-to-delivery. A prebuilt solution is ready to go as soon as you install and configure it and show your personnel the ropes.
- Newest updates. You are not responsible for researching and implementing the latest technology trends into your system – your provider is. Useful updates and extensions will be delivered at your digital doorstep, and the only research required from you will be on whether you need the new features.
- Support desk. While your team will operate the management system, it will not have to be solely responsible for solving potential tech issues. Your vendor will most likely have its own tech support to help you deal with potential bottlenecks. Do your research, though, and read the reviews – response speed and consistency of support services is a frequent topic of discussion, and it is highly likely that you will encounter comments that will provide you with unbiased insight.
- Access to other products. Most Supply Chain management software providers try to expand beyond just one management system. By gaining access to one tool, you will also get a chance to explore other solutions your vendor offers. You might stumble into things you would not think of for yourself but find useful now that you know. Be wary of vendor lock-in, though. If your WMS is from a provider A, implementing a TMS from provider B into your system will be a way bigger challenge than rolling with solutions found all in one place. Choose with whom you would rather deal with in the long run wisely.
Risks of Buying
Prebuilt solutions are often good, but they are not often perfect. Designed with a one-size-fits-all approach, they may not align with the specific needs and intricacies of a company’s supply chain operations. This mismatch can result in inefficiencies, increased costs, and missed opportunities for optimization. There’s also the risk of hidden costs. Customization, integration, and ongoing maintenance expenses can quickly escalate the total cost of ownership.
Security concerns are another thing to consider. These prebuilt systems may not have the robust cybersecurity features necessary to protect sensitive supply chain data, exposing the company to potential data breaches and compliance issues. Carefully assess your unique needs and evaluate the limitations of off-the-shelf solutions before making any critical investment decisions.
CONCLUSION: MAKING YOUR CHOICE
The dilemma of build VS buy boils down to the priorities and overall logic of your logistics. If your main priority is speed, and your business needs to see the return of investment as soon as possible to thrive, buying a supply chain management solution, or subscribing to one, is the way to go. If you value control above all else, and are willing to sacrifice a little time to ensure that the finished product factors in your every whim, it is reasonable to commit to customized development.
Innovecs can help you make an informed choice of your supply chain management software provider, help you to implement the technology into your system, and expand its functionality. Our experts will walk you through the early stages of SCM software deployment and provide you with exceptional tech support later. Likewise, if you are interested in creating your own custom solution, we will be happy to hear from you and talk details.