Providing a personalized and seamless customer experience is no longer just a nice-to-have but a must-have. The opportunity to achieve this revolves around understanding your customers’ behaviors, sentiments, needs, preferences, etc. In other words, you need Customer Intelligence.
The key question is, “Should we build or buy a Customer Intelligence solution?”
Each method has its benefits and is suitable for different business objectives. Some companies buy software for immediate access to business solutions, while others will build as part of the company’s infrastructure plan.
So, which one is for you?
Here are 5 things to consider before you make the decision.
1. Cost
Buy:
When purchasing a SaaS solution, you need to consider the recurring subscription fees and add-ons. SaaS vendors will own development, maintenance, and all back-end support costs. The best part is you can begin using the solution in a relatively rapid timeframe.
Build:
Building your own solution is resource-intensive because you are 100% responsible for the initial build-out, labor costs, product testing, usability, ongoing maintenance, etc. Long-term monetary cost and resource bandwidth need to be considered when building internally.
2. Time To Value (TTV)
Buy:
Although each business has its unique challenges, there’s likely a SaaS solution that can be configured to fulfill your needs. When buying a SaaS solution, you must evaluate the solution to ensure that it can help solve your pain points. Finding the right solution will shorten your time to value and help you address the business needs instantaneously.
Build:
While the solution is made for your unique problem, you won’t be able to put it into use until the development is done (and bug-free). The critical questions to ask when building a solution are:
“What is the expected timeframe for this project?”
“How long can we wait?”
If the answers are out of line with the urgency of your needs, that will narrow down your decision.
3. Roadmap Control
Buy:
Buying a SaaS solution gives you the immediate answer to business challenges, but you won’t have complete control over the product roadmap. Although your feedback (as a buyer and user) can still make a significant impact, your influence may vary upon their company strategy.
Build:
Building a solution gives you complete control over the feature roadmap and strategy. However, these projects also require a lot of ongoing time and resources.
4. Scalability
Buy:
Third-party software is typically more scalable and cost-effective over time as innovation and maintenance are ongoing as part of the contract agreement. In addition, the speed of innovation is generally faster for buying a SaaS platform than building internally.
Build:
Companies that spend large budgets developing internal solutions often plan to monetize their software afterward. While the market is quite competitive and saturated, companies can still profit if their solution is disruptive. In this scenario, the business need is not immediate, and companies have additional budget and resources to experiment with a new product line or pivot their current business model.
5. Opportunity Cost
Buy:
Purchasing SaaS software mitigates opportunity costs. You can continue to focus on your core business activities instead of redeploying resources while taking advantage of the SaaS platform’s already-live functionality in a much faster timeframe.
Build:
Building in-house can take key resources from profit-driving activities. How much more could you sell or achieve if these resources remained focused on the core activities of the business. Also, your competition may catch up if you divert your focus.
What’s the best option for you?
Understanding the urgency of your needs and evaluating your budgets will give you optimal answers.
Buying:
Pros: Cost-effective, quick time to value, more scaleable, less resource commitment
Cons: No control over roadmap, no customization
Summary: Best for solving immediate business needs with time constraints
Building software
Pros: Complete control over roadmap, opportunities for monetization
Cons: Cost-intensive, long time to value, more long-term resource commitment
Summary: Best for developing a new product line or pivoting current solution
Both build and buy have pros and cons. Weighing the key factors above can help you determine which direction is optimal for your business. And, remember your decision is never finite. If the direction you choose does not work out, you can pivot and take the other path!