What to Consider Before Building or Buying Your Subscriber Management and Billing Solution
When a company needs to introduce a major new piece of software, there is always the dilemma of whether to build it in-house or buy an off-the-shelf solution.
Building in-house enables greater control over the process and total customization but can lead to extra costs overall compared to buying software. It also requires internal resource to maintain and prevent it from becoming obsolete over time.
Purchasing an external SaaS (Software as a Service) solution usually works out as the cheaper option and it also gives businesses the chance to benefit from the continued development of that software. Crucially, it can also be a much quicker development process than an internal build.
Before you can make the decision of whether to build or buy, there are several factors you need to consider:
- How quickly do you need it?
- Does it need to be better than the market alternatives or just good enough and familiar?
- What’s the budget?
- What resource is available in-house to potentially build and manage it?
- What off-the-shelf options are there?
- How would any solution fit into your existing tech stack?
The question of whether your new project needs to break new ground or offer significant improvements over what’s already out there is a difficult one to assess generally. That might always seem like the goal of any new development, but history is full of products that were ‘just good enough’ but still transformed their industries.
The MP3 revolutionized the music industry by losing some of the quality of the music itself when compared to records or CDs but focusing on the convenience and portability of new technologies like iPods and smartphones.
If more time had been taken to try and compete in terms of fidelity, the opportunity might have been missed, and the follow-on success of streaming giants like Spotify shows that millions of us are happy to listen to ‘just good enough’ sound quality in a format that fits into our lifestyles.
Applying this principle into the build vs buy dilemma, it could well be that an argument for building would be the intention of creating something revolutionary, instead of buying an off-the-shelf solution that might be similar to what your competitors use.
However, if that solution does exactly what your customers need in a way that they will be familiar with, it might prove to be better to go with it and try to distinguish yourself from the competition by how you customize and utilize the software or product.
In MagnifyMoney’s annual consumer ratings for mobile banking apps for 2018, the reasons given for high or low ratings of these applications are all factors like having a simple and clean layout. Ron Secrist, head of online and mobile banking at Capital One, told Business Insider that their focus was on: “Offering innovations that customers are looking for—not just innovation for innovation’s sake.”
For that reason – amongst others – banks rely heavily on outsourcing software development, and their apps tend not to vary in style or functionality. MagnifyMoney’s ranking of the 50 largest banks and credit unions found that the average rating out of 5 was 3.7, with the lowest ones being at 2.0.
One question that tends to be discussed at this stage of planning is what the key features of the end result might be. But the problem is that companies rarely know for certain.
This is when the kind of product management that comes with a buy solution can be crucial, with the expertize available from people who know the market and can advize. There’s no problem with having a wish list but trying to decide which features will be key is an impossible job without the right guidance.
If you want to find out more about the Build vs Buy Dilemma, you can read all about examples of when each strategy has gone right – and wrong – as well as finding out more information about the benefits and pitfalls in our whitepaper, which you can download below.