Is It More Cost Effective to Buy or Build My Company’s Intranet?

In the age of the digital workplace, the use of high-tech intranet software platforms has become an essential component of success. To guarantee success in the marketplace, a company must ensure that their product stands out from the rest. Thus using technology is crucial. The question on many companies’ lips is not whether to implement an intranet software platform – it is whether to buy or build that platform.

In-house expertise

When considering the buy vs. build problem, companies need to ask themselves some important questions. Firstly, a company must determine whether they even have the skills in-house to develop and design the necessary intranet software to begin with.

The size and capability of the in-house development staff is a crucial determining factor in answering the buy vs. build problem. If a company lacks sufficient manpower to design and develop the software or program that they desire, the only option is to utilise a proven success.

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Designing an company intranet software platform requires huge amounts of expertise. Does the in-house tech team have the ability to pull off what is required? If not, will experts need to be brought in to aid in the development process? Either way, this will significantly increase the time and cost of a custom-build.

Engaging in a custom-build process requires much more time and money than buying a commercial, off-the-shelf product. If a company wants to implement an intranet software platform in a short space of time, without incurring unnecessarily high levels of investment, buying on the open market is the only way to go.

Potential pitfalls

Even if a company decides that the in-house team has the capabilities to carry out a custom-build, there can be unforeseen financial pitfalls in the development process.

In the UK, the NHS commissioned an Integrated Healthcare Records System in 2007, the largest ever civil IT product in history. The initial budget of the product was £6.2 billion – however, after four years and an investment of over £11 billion, the project was scrapped. Besides lacking the necessary technical expertise to carry out the custom-build, the required functionality of the system was completely underestimated. In place of the custom-build, the NHS decided to buy an off-the-shelf IT solution.

Cost-effectiveness

A company must also ascertain the availability of a solution on the open market. If a ready-made platform already exists that fits the necessary requirements, it could be more cost-effective to buy that platform instead of building your own. Rather than spending needless time and money building an intranet software platform that is similar to products available on the open market, buying a commercial, off-the-shelf product (COTS) would be more efficient.

Define your intranet requirements

Similarly, it is important to determine if the necessary characteristics of the required intranet software are unique, or if a platform already exists that provides the desired functionality. If such a platform does exist, buying becomes a more attractive proposition over building your own.

A company must also consider their timeline requirements. Is it important that the intranet software platform is available to use in a short amount of time? Building software from scratch can be a lengthy process, with many unexpected roadblocks along the way. If it is necessary for the intranet software to be available as soon as possible, buying a platform that already exists would be a better option.

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Many companies believe that a custom-build is the only way to own an intranet software platform that provides all the necessary features and functionality.

But that is not the case. In certain cases, such as desktop productivity applications, operating systems and financial management software, off-the-shelf solutions provide all the capabilities that any company could wish for. Engaging in a custom-build process to provide a level of functionality that already exists on the open market is a waste of time and money.

In conclusion

When considering whether to buy vs. build, it is essential to evaluate the adaptability, reliability, scalability and usability of pre-existing software platforms. Is there a platform on the market that allows you the ability for full customisation? Is it possible to fully integrate the platform with the company software? Does it offer a high level of reliability? If a pre-existing platform meets all of these requirements, then buying instead of building becomes a more effective route for your company to follow.

Moreover, if an intranet software platform is already available on the market, and it is a core requirement of company operations, it is much more advantageous to license a ready-made platform. Taking a large amount of time and money to design a system that is essential to the running of a company, when it could be acquired much cheaper and faster is entirely self-defeating.

Finally, a company must consider the long and short-term costs when deciding whether to buy or build. Building technology from scratch can be a lengthy and expensive process. Unless a company has very specific needs from a platform, spending needless amounts of time and money investing in something they could get much cheaper and more quickly on the open market would be counter-intuitive.

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