To Build or To Buy
A Business Document Software Solution Model for Small and Medium-Sized Companies
The concept of outsourcing has a complex history. For many years, it was every business for itself. Gradually, companies began to employ service providers to complete tasks that were too costly for in-house staff to handle. Finally, in the late 1990s, advancements in technology made it possible to outsource one of the most complicated components of business organization – document processing.
As technology continued to improve, companies brought document processing back in-house, developing software to create, sort, and archive important data. Unfortunately, creating new software can be an expensive undertaking, making it unreasonable for a number of small and medium-sized companies.
For these businesses, the choice has become situational. Which option makes the most sense for your company? To build or to buy?
Save Your Company from Document Software Disaster
Before you can make an informed decision, there are important factors to consider. These factors include overall cost, project complexity, possible risks, and competitive advantages. In the following sections, we’ll explore these factors, among others. Considering them carefully will help save your company from possible disaster.
Reduce Your Document Software Costs
The following factors can affect whether your company saves or loses money:
1. Overall Cost
Companies often find the initial cost of an outsourced Document Software System is less expensive than developing a similar system in-house. On the other hand, small and medium-sized companies must also consider the cost of implementation and ongoing maintenance.
When companies choose to buy a Document Software Package, certain risks are avoided, including control, performance, and completion – any of which can fail during the building process. Still, there are vendor-related risks, such as reliability and support.
Buying an oversized package can require expensive resources to maintain and operate, while built packages can be requirement-driven, meeting the specific needs of small or medium-sized companies.
4. Intellectual Property
When a Document Software System is built in-house, the hosting company owns its intellectual property. Using a purchased solution may require ongoing costs for licensing and creative rights.
Building a Document Software System is often more time-consuming, and thus more expensive, than buying a similar application. However, if your company needs a long-term solution, the added time may be worth the investment, as purchased systems may eventually disappear or outlive their usefulness.
Consider Structure When Implementing Your New Document Software System
The following factors can affect the reliability of your new Document Software System:
1. Operational Traps
Companies with no outsourcing history are more likely to develop in-house systems, even when it doesn’t make financial or functional sense, leading to ultimate failure. In addition, when management doesn’t support the build or buy decision, the Document Software System will likely not function as intended.
2. Support Structure
All companies have an existing technological back-end. This current support structure must be taken into account before making the build or buy decision since purchased (and improperly built) applications can often clash with existing technology.
3. Competitive Advantage
Building a customized system can provide a certain competitive advantage for small and medium-sized businesses. Having a system that competitors cannot touch without intellectual property rights makes it possible to consistently update and compete without relying on outside assistance.
4. Requirements Fit
If an implemented system doesn’t meet the needs of a small or medium-sized business, there’s no point in having it. Ensure the program includes all necessary functions before buying or make the requirements clear before starting a build.
Some companies have argued that less strategic applications should be purchased, since the cost is often more reasonable than an in-house build. When the needs are complex, it can help significantly to build components that fit company strategy.
Choose the Right Document Software Solution for Your Company
When choosing to build or buy, it can help to explore the choices of other company owners. Let’s examine a case study from Reynasa, a company that chose to buy its Document Software Solution, DocPath Business Suite Pro for iSeries.
Q: How did the idea of using DocPath come about?
A: We started out with a traditional ERP (Enterprise Resource Planning) based on matrix printing. At a certain point, management detected our need to improve the overall quality of our business documents to be able to include more information and to use new distribution channels, such as email. Finally, we decided that our matrix systems should be replaced with laser and had two options – invest heavily in adapting our document management systems or purchase a product that would allow us to implement laser printing without large internal software developments. We were looking at several options and finally opted for DocPath.
Q: What telecommunications infrastructure does Reynasa have? How important is technology to your business?
A: Our six branches are connected by a fiber-optic, star-shaped network that depends on the host at our headquarters. Our communications are centered around this infrastructure, whether it be data, audio, or image. For quite some time, technology and information systems have given us a significant competitive advantage by increasing the flexibility, reliability, and quality of our customer service. Now, however, our main challenge lies in turning IT into an important of our strategy toward opening new markets and business opportunities.
Q: Why did you choose DocPath’s Business Suite Pro for iSeries? Can you explain the requirements of your company and how DocPath Document Software responds to your needs?
A: Our host was an AS/400, the current iSeries. Our first need was to migrate from our matrix printing system, related to our ERP on the iSeries. We needed to move quickly to laser printing with new formats and new features, such as charts and barcodes, generation of PDFs, delivery by email, etc. DocPath could solve our needs quickly and easily. We would be able to map the iSeries print output formats and turn them into documents of a much higher quality without modifying our management systems. We would be able to generate electronic documents and send them automatically by email without large internal development efforts.
Reynasa considered time, complexity, and company strategy before choosing to purchase a Document Software Solution. Because the company needed a timely solution with convenient features that didn’t require modifying current technology, DocPath was a smart solution.