Today we live in a world that is rapidly changing, innovating, and adapting to gain a competitive advantage. Businesses must be fast and agile to respond to market conditions, and achieve this while becoming more profitable. In a time when we need to be smarter, more efficient, and more profitable, we are faced with some of the toughest challenges to overcome. Fortunately, just about any problem can be solved through technology and careful planning and that is what I wanted to talk to you about today.
It is important to know what kind of options are available to you. There are a number of solutions out there that have already been built and are ready to help you operate better and save money. In many cases, this is perfectly suitable and will net you the result you are looking for. Oftentimes though, these pre-built solutions lack at solving more complex issues and need a customized solution. While this seems straightforward, you would be surprised at how often this gets lost on business leaders while searching the market for existing products. Instead, they will settle on a less than ideal solution that may provide some temporary relief, or they choose to forego the technical route and try to solve the issues by hiring more people and apply brute force, or worse yet keep things the same. The problem with these routes is that they aren’t truly solving the problem, can run into scaling issues and waste time and money.
When trying to solve for your unique business needs, often the correct solution is a custom one. When considering a new technical solution, it is important to take into account 3 key areas to measure the impact it will have on your business. I call these the 3 necessities to ensure that this is a worthy investment into the future of a business.
Does it add value to your company?
There are several different ways technology can add value to your business. The best part about building custom software is that it is your intellectual property! This increases the value of your business if it is packaged well. For example, at BubbleUp we have developed our own CMS called Connect. Our CMS runs our entire development process but also has the flexibility to integrate with just about any 3rd party platform such as ecommerce, email marketing, and even large ERP platforms such as Salesforce. By building our own software we have added tremendous value to BubbleUp. It is a custom solution that helps us operate very efficiently, is easy to use, and can be productized for commercial use down the road. For your business, not only are you solving your unique problem, but you are also creating opportunity.
The difference in owning or using someone else's technology is a lot like renting or owning a home. If you use an out-of-the-box software, it is a lot like renting your home. The upfront cost is less, but you will always have to pay for it, and it doesn’t add to your net worth, or in this case, the value of your business. Whereas, if you build a custom solution, it is more like owning your home. There is a higher upfront cost, and some maintenance from time to time, but it adds to your personal net worth/ business value.
Does it improve your bottom line?
When considering your revenue impact, we need to look at this from both sides of the ledger. What is the upfront cost? Does it make you money? Does it allow you to scale easier and reduce labor costs? What is the short term and long term impact? Recently, we built a custom software solution that reduced the time it took for users to complete daily tasks by 50% or more. It was a complex piece of software, but the return on investment will be realized within the first year, and with an expected life span of 6-8 years will save millions of dollars in overhead and labor costs. It is not a consumer facing product that generates revenue, but improves the bottom line significantly by reducing expenses. With R&D capital expenditures such as these, you can amortize the costs associated with the software, making the investment even more worth it. More often than not, well crafted software solutions will check off most of the questions I posed above.
Does it solve your problem?
As in, does it REALLY solve your problem? It is important not to settle on half-baked solutions that do not fit the needs of your business. Carefully vet out your options and understand what the candidates provide. Know what is available to you. If you can’t find it, it might be correct to go the custom route.
As an anecdote, we at BubbleUp decided to use a project management software that checked most of the boxes, but not all. It was easy to use and relatively inexpensive. However, in order for it to fully serve our needs, we had to build our own custom software to help support the Project Management system which took a significant amount of time and effort. To this day we are still bolting on functionality to serve our needs. It gets the job done, but it is far from ideal. First we are paying for software that isn’t ours, and we had to build additional software that is specifically designed for this project management system and not compatible with others. These sunken costs will not increase the valuation of our business and we feel somewhat locked into this solution. The lesson here is to choose carefully. There are good pre-existing solutions out there, so I don’t expect and couldn’t in good faith condone custom development for everything. However if the options aren’t fitting, explore the custom route.
If you are in search of a custom solution please contact us!