Is it better to build your own website or buy a commercial eCommerce package?
As we here at NetSphere Strategies mentioned in a blog posted earlier this week, we will be looking at the options available to eCommerce businesses in a three-part series that addresses whether to buy, build or host your new site. For our second installment, we’ll focus on the pros and cons of buying a commercial eCommerce package.
Like the snowflake, no two eCommerce businesses are alike. And that’s why it’s important to weigh the odds to determine what’s best for your business. For some, launching a website will be all about creating your own online presence in-house and from the ground up. But for others, a new website means investing in a proven eCommerce package and selecting a service provider to customize that commercial software solution to fit your business needs.
For those who are leaning toward the purchase of a commercial eCommerce package, here are six reasons that support that decision. And to play devil’s advocate, we’ve included six reasons to reconsider.
Pros to Buying:
- Accountability. If a commercial program doesn’t work, there’s a vendor on the hook to make it work. And users have a weapon, their license fees, to make sure the vendor delivers the goods. Some companies make decisions to buy versus build because of this “one-throat-to-choke” mentality.
- Core Business. Is your core business to produce software code? Focus on what you do best and don’t get sidetracked. Calculate the time, money and resources it will siphon off your business before you take on the build juggernaut. You may be biting off more than you can chew.
- Quick To Market. A solution is available to you today – meaning you won’t have to wait several months for development. There are some lightweight turnkey or SaaS solutions that can be practically used right out of the box; some will require fewer services to get you started quickly. If you are willing to sacrifice functionality for speed, this option may be for you.
- Integration. Tight integration built into a vendor’s software suite of offerings provides a compelling argument of seamless data transfer between applications, simplified management, enhanced functionality and reduced integration costs. However, these trappings can also lead to vendor lock-in concerns.
- Less Risk. You know what you’re buying. Your eCommerce solution provider can demo it, reference happy customers and provide a test drive. If you’re satisfied with software that performs 80 percent of your needs, this package is for you. Others may opt to build a solution and pursue higher levels of control to develop 99 percent of what their business needs.
- Stability. Commercial eCommerce packages available to the public have been tested by hundreds if not thousands of clients over the course of time and tend to be stable solutions. When you build your own eCommerce platform, the user acceptance and integration testing is not nearly as detailed, nor has it gone through the same volume of use cases. Expect more stability issues when you build your own site.
Cons to Buying:
- No Source Code. When you purchase your solution, often times, you can’t make changes to the source code because you don’t own the software; you rent it. Changes are made by the vendor on their timeframe, not yours. Software vendors are slow to respond and new features are released in one-year increments at best.
- Rigid Contracts. Over time, companies find themselves adapting to the software limitations rather than tailoring the system to fit their growing and changing needs. Eventually companies find themselves locked into a contractual arrangement that becomes less advantageous to them.
- Perspective. While some organizations are reluctant to use OSS because of its lack of the "one-throat-to-choke" mentality, others recognize that depending on one supplier represents a single point of failure. Many companies went through this experience during the dot.com bust.
- Retrofit. You can either make your business processes fit the software or go through a costly customization. If you customize too much, you may not be able to upgrade when the next version rolls out. Remember, the business practices of purchased software is available to your competitors, too.
- License Constraints. There are stiff restrictions on how the software can be used, so know them well. If the software vendor’s solution is deployed on multiple CPUs or computers – the cash register sings cha-ching, cha-ching! Remember: Licensing fees is how you pay for the vendor’s marketing costs.
- Renewals. Other than the capital outlay for the initial software purchase, expect to pay another 20 percent for annual software support. You are then forced to migrate to a new version whether you want to or not to maintain vendor support services. This turns into a vicious cycle of costly upgrades.
To delve deeper into these options, get in touch with the team at NetSphere Strategies. We’ve worked with various clients as an advisor when it comes to making strategic decisions. We can help you choose which route to take and can ensure that the journey is a smooth one.
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