‘Buy vs. Build’: The Overlooked Reasons for Buying SaaS

By David Mostovoy

Build vs Buy

As an employee of a software as a service (SaaS) company, I could write a blog about the perennial “buy vs. build” debate for software platforms and weigh pros and cons. However, that’s been done many times before. So instead, let’s kick this off with a case-in-point example of why “build” might not even apply to your business.

We begin in the grocery wars. Kroger CEO Rodney McMullen has said, “We have to become a tech company that happens to sell food.” The supermarket giant is currently in the process of building its first robotic warehouse in Cincinnati through a partnership with British online supermarket Ocado. Kroger is taking on retail technology giant Amazon while also competing against Walmart, another retail Goliath and technology innovator. These giants have the need, as well as the budget, to invest in proprietary systems as they seek to gain a competitive edge over each other.

But let’s say your footprint is a fraction of Kroger’s or Walmart’s, and your objective is simpler. You want to be an excellent operator while building customer trust. Building your own operations software likely won’t give you a competitive advantage here. It won’t set you apart from your nearest competitors compared to things like higher-quality service, offering products at a lower cost, and making your customers want to choose your store over your competitors. It’s little things that matter at this stage, and therein lies a big risk in devoting resources to the pursuit of custom software.

Here’s why:

    1. Cost

Nothing is free. While there’s a perception of cost-savings by using an in-house or outsourced team, that’s not necessarily the case. Software development can become a money pit as you begin to factor in the amount of time it will take to create a custom platform, which is difficult to pinpoint, as well as the cost of ongoing maintenance. Consideration should also be given to opportunity cost. By dedicating your team members to the creation and implementation of this software, you may be foregoing other opportunities for innovation and adding value to the business.

    2. May Not Meet Expectations

There’s significant risk associated with building your own software. After you’ve invested time and money, it may not work the way you want it to. There will likely be bugs, or perhaps the developers you hired aren’t able to carry out a feature quite as you envisioned it. According to experienced software developer Matt Mazur, you might be better off paying for a tool that is 90% of what you think you need vs. spending weeks or months building something that might be 100%.

“I usually default to buy unless there is a compelling reason to build. In my experience software usually takes much longer to build than initially expected so it winds up making more sense to pay for a 90% solution that you can have immediately and devote those engineering resources to the core business.” — Matt Mazur, software developer

    3. Maintenance and Scalability

Your software platform should be nimble enough to grow and adapt to your needs. A custom-built platform will have to be maintained internally. Companies may not have the resources to scale their development team as business needs become more complex.  

This is where a partnership with a SaaS provider becomes particularly valuable. You’ll have needs and questions, and with experience succesfully implementing their technology in your industry, they’ll be contracted to and able to provide great support and service.

The Takeaway

There’s an added advantage of working with a SaaS provider that provides solutions in your specific industry. Here at Zenput, our team partners deeply with customers in the restaurant and retail space to create great experiences across every restaurant and store. At our core, we’re helping operators tackle the critical “last mile” execution problem they face, and we want to go to extra mile to make sure our customers are getting the most value and insights from our platform.

Check out customer stories to hear how employees and brands are benefiting from Zenput’s platform.

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