Tech adoption is critical to success in any industry. Most business leaders understand that need at this point in the digital revolution, but many don’t take their digitization strategies far enough. Every company should focus on software development as it becomes an increasingly central part of core functions.
Capitalizing on business software is often portrayed as a matter of vendor selection, and in many cases, that’s fine. However, you should consider developing at least some of your tools in-house. Here’s why.
Software Is Essential for Modern Businesses
The most straightforward reason to manage your own app development is that every business needs reliable, relevant software. Companies spend 18% of their revenue on software on average, making it the largest IT expense category.
This spending has a reason, too. You must capitalize on digital tools’ speed, accuracy and data-centricity to compete in today’s tech-driven market. Because so much of your business relies on software, you might as well meet your own needs instead of creating more third-party dependencies for core functions.
Depending on how much you pay for certain functions, you could have significant room for savings if you use proprietary tools instead of SaaS alternatives. You must compare development and upkeep costs to current SaaS payments, but it’s worth checking, considering how much you likely spend on software.
Proprietary Solutions Offer More Relevant Help
In-house software could also be the best way to meet your specific needs. You can choose from many SaaS vendors today, but many try to serve various markets. As a result, they may offer more generalized solutions when you need something specialized. By contrast, building your own tools using an expert SaaS development agency ensures your software is exactly what you need it to be.
A McKinsey study found that 69% of top economic performers developed proprietary software, compared to 49% of everyone else. That represents the biggest gap of any digitization strategy between high and low performers. This discrepancy suggests that creating tools to fit your needs can yield significant economic benefits.
One of the most common reasons any technology investment fails is because businesses struggle to align their investment with their needs. Developing software tailored to your exact specifications ensures you avoid that mistake, enabling you to get the full value from the app.
Original Software Opens New Business Opportunities
Building your own software can also create new revenue opportunities. The most straightforward way to capitalize on it is to sell your solution to other companies. You could have a dedicated niche to sell to if your software meets a need no other available solution does.
More original intellectual property (IP) also increases your business’s value. Intangible assets like IP often count in your company’s sale price if you sell or merge with another organization. Consequently, you’ll get a better deal than if you exclusively used off-the-shelf software.
In either case, these monetization opportunities can compensate for development costs. That revenue could make in-house development even more cost-effective compared to SaaS alternatives.
Challenges and Solutions in In-House Software Development
Given these benefits, companies should consider developing some of their own software. However, that can be a challenging undertaking. Here are some obstacles and considerations to keep in mind to make the most of in-house development.
Overcoming the Tech Talent Gap
The ongoing tech talent shortage is one of the biggest difficulties for software development. Developers are among the four most in-demand professions today, with 53% of IT professionals saying recruiting them is their most significant business challenge.
Overcome this gap by focusing on reskilling rather than looking for outside talent. When available professionals are limited, fostering expertise from within is often better. Offer career development opportunities to teach current employees the development skills they need. Using low-code and no-code tools will also help by lowering the barrier to entry.
Managing Dev Costs and Timelines
Businesses should also consider that development can be a long and costly process. That may scare some companies away from proprietary software, but there are a few ways to manage these concerns.
The agile development model lets you fix issues as they arise, minimizing rollout timelines and costs associated with remediating errors. You can also save time and money by automating parts of the development process. Code-generating AI can reduce errors and streamline schedules without needing additional staff.
Getting all you can out of your proprietary software is a collaborative effort. The most important thing is to make a tool that fits your unique needs better than available alternatives. Therefore, development teams must work closely with the workers who’ll use this software daily.
The agile framework helps in this area, too, as working in short, collaborative sprints helps ensure the project stays on target. Be sure to involve all stakeholders as much as possible and test frequently to deliver maximum value.
Every Business Today Is a Tech Company
Amid widespread digital transformation, any company today is effectively a technology company. Competing means capitalizing on digital tools, and in many cases, building your own software is one of the best ways to do that.
Software development can be challenging, but the benefits are too great to ignore. You don’t need to create proprietary solutions for every business function, but some original tools can go a long way.
Devin Partida writes about investor technologies, big data and apps. She is also the Editor-in-Chief of ReHack.com.