Software Development: How To Avoid In-House Projects Failure?
Business leaders from organizations must have wondered if they couldn't have just built this software themselves. It is not rare for them to ask themselves if the companies' own development team can bring up a less costly custom product.
As a decision-maker of the company, the business leaders need to pay attention to some case studies related to "in-house development" decisions that led to longer timelines, overspending budgets, and poor outcomes.
Take General Electric as an example, the decision-makers of the company were having an attempt to create an ambitious in-house digital transformation. However, it was such a failure due to organizational dysfunction. It led to a priorities conflict that lasted for years. There are probably more "build" stories that have never been mentioned in headlines due to the fact that no companies want to talk about their internal failures in public.
Conduct thorough research and assessment beforehand
Business leaders should be cautious of in-house development projects for software applications that are trying to launch in their industries for the first time. This could be seen a lot in SME (small-medium enterprise), where several over-confident companies with simplistic solutions underestimate the complexity of the industry including consumer trends and business overview, regulation, data, practice, and financial dynamics.
Business leaders of organizations who directly join the decision-making process should remember that vendors that succeed in other segments of the economy will not always get the same outcomes elsewhere.
"Some" solutions usually have a shorter lifespan. Some business organizations are often struggling with their in-house solutions which have been outdated. However, finding a better way to meet the ever-changing needs is not finding a needle in a haystack anymore. Business leaders can easily invest in a solution that comes from a software expert and is configurable, scalable, and flexible for the needs of the companies.
Business leaders should carefully consider the cost and timeline before being determined to use an in-house development team to build their own solutions. According to an article by Harvard Business Review, there is 27% of the average cost overrun among 1,471 information technology project studies.
There are more costs for these decision-makers to consider. A company that starts developing a proprietary solution from scratch will have to take responsibility for the entire cost of development.
However, the development costs can be distributed across multiple clients by vendors if the company decides to outsource or buy solutions from them. Vendor solution brings greater cost predictability since it includes a shorter and safer timeline.
Focus on the core competencies
The scenario is much more complex in certain sectors like the retail or healthcare industry. The clients of high-tech firms that are serving operate in a challenging environment. In ecosystems that are defined by flux, reinventing the wheel does not make any sense at all.
Organizations, no matter what industry is, are suggested to focus on the core mission. It is certain that developing software is not an easy job for industry outsiders. Relying on experts who have years of experience working in software development is advice for the business leaders of these organizations.
Pay Attention to The Long-Term Picture, including Upgrade and Maintenance
Have business leaders ever wondered if their organizations chose the in-house path, what would happen to the knowledge resources of the companies over time? If they decide to take a 'build' solution, the product will definitely become their property, which means they have to take responsibility for every challenge that might happen with it.
For example, if there is a serious error or if the product becomes obsolete, will the companies be able to keep their product up to be available within the current resources? Can the companies continue to compete in innovation with their competitors while handling the problems above?
Moreover, it is not easy for the organization to command the talent in the marketplace to remain the operation of a unicorn solution at its peak value. There will be trouble when the development talent and expertise of the company erode. The firm needs a deep knowledge foundation in training users and providing day-to-day technical customer support because it is integral to long-term success.
There will be an ongoing tide of integration requests that the management should carefully prepare for. Another cost that is often overlooked is related to contracting and partnership for those requests becoming a perpetual administrative function.
Look outside your organization
Business leaders should carefully consider whether to outsource, purchase off-the-shelf or build in-house software by choosing between a mature vendor that is already available on the market that will do the job for them or using an in-house development team.
For instance, in the healthcare industry, and interoperability infrastructure that needs to follow the recent regulations of the government has been developed by smart vendors. business leaders can look for any software-as-a-service companies for this kind of commitment because the process of buying a solution is much easier.
Business leaders should consider what they want to achieve from creating a proprietary solution when they could have smart vendors to finish this hard work for them.
Are they going to achieve a competitive advantage if they use an in-house development team to build a proprietary solution? Business leaders should also need a practical view of the risk and ROI when building a solution by themselves. Do their companies have sufficient budget to invest in building a comprehensive solution from scratch?
Business leaders need to understand the fact that knowing when to hire real external IT experts is a strength, not a weakness. It could help their companies save time and money to do what they do best instead of wasting on developing a vague solution.