The Situation
As at any firm, a specialty chemicals company can buy third-party software like Alchemy for specialized applications such as digital lab notebook and lab workflow automation or build custom applications from scratch. Spurred by the perceived fear or real impact of COVID-19 to their business, chemical industry leaders are scrutinizing external spend more closely than perhaps ever before.
Below we will describe both the long-term real cost as well as the short term opportunity cost associated with precisely this decision. And while the right answer isn’t always “buy Alchemy” (despite our best efforts!), there are a few fundamental questions leaders must ask / answer honestly as they consider getting the most out of software options.
Build vs. Buy Questions. Below are five categories of important build vs. buy questions that you should discuss as a management team. They cut across multiple functional areas of responsibility.
Corporate Strategy
- Is software development a core competency of our company?
- Do we want it to be?
- Why or why not?
Availability of Resources
- Do we have the business resources to devote to defining a custom solution?
- Do we have the technical resources to devote to building, testing, enhancing and servicing a custom solution?
- Do we have a team of developers or consultants with deep experience building not just base capabilities but market-leading capabilities?
- Do our developers have strong Apex skills if building on Force? Do they have the latest ABAP skills for SAP which are required to address inherent application complexities?
- Have we ever built a similar application? What was the outcome of that build?
- Our functional requirements will certainly change over time - what is our staffing plan for ongoing changes and enhancements?
- If we use consultants, what will we do when the consultants leave and we need to update our custom-built applications?
- What is our staffing plan for local / regional / global user support?
Complexity & Purpose of the Project
- What are we trying to achieve?
- Do we understand the application requirements well enough for our coders to build both short-term functionality and the robust infrastructural components required to meet our long-term business objectives?
- Do we understand the nuances of the business requirements that drive technical complexity?
Cost Considerations
- Do we understand the requirements well enough to accurately cost the project?
- Most importantly, the cost of writing and testing software usually represents only 10% of the cost of a software project - do we have the budget for the other 90%?
Opportunity Cost Considerations
- How soon do we need the software in place?
- What is the cost of not having the software in place today and waiting for custom development?
- What else could our internal resources be working on?
- Are we willing to wait X quarters until we can define, build, test, train and roll out a custom solution?
Top Reasons to Buy vs. Build
There are common reasons why companies decide to buy rather than build software. Here is a summary of the top seven reasons to buy Alchemy over build from scratch.
- Lower Total Cost of Ownership (TCO) - Alchemy is a more cost effective way to define, setup, deploy, enhance and support digitalization.
- Superior Product - depth of user functionality and ease of use through years of industry specific, customer-led development.
- Faster Speed to Market - deploy Alchemy in weeks instead of quarters or years.
- Specialty Chemicals Product Roadmap - relevant future enhancements are included in the pricing and ensure that the application remains state of the art.
- Less Risk - you get functionality “out of the box” instead of waiting for 12-24 months to see a custom-built application that may not end up working as needed.
- Easier to Maintain - use a point & click user interface to enhance a library of digital processes vs. building a custom application that hard-codes your current processes and requires additional coding resources - which you may not have available in the future - to change as your business evolves.
- Global Service & Support - Alchemy has support teams standing by to answer any questions that come up across all time zones and is included in the pricing.
Conclusion
In nearly all situations, buying a product that has already been road-tested by other companies just like yours, is better - cheaper, faster, more robust, less risky and more future-proof - than building a custom application where you start from scratch and need to code every enhancement.
Alchemy was purpose-built for specialty chemicals, it can be quickly customized to address your exact chemistry, workflows, test types, data collection, and analysis requirements more quickly and cost effectively than building an application from scratch.
Specialty chemicals companies work with Alchemy because they want to accelerate product development and improve service delivery with software that can streamline and automate their processes. With Alchemy, this functionality comes out of the box which enables our customers to realize immediate ROI and focus on what they do best - great chemistry.
Finally, because Alchemy only serves the specialty chemicals industry, its entire product roadmap will be value-added and directly relevant to specialty chemicals companies - the ultimate in future-proofing your IT spend.
1. https://fullcircleinsights.com/buying-vs-building-your-marketing-solutions-evaluating-the-costs-of-custom-software-development-on-the-force-com-platform/
Other resources:
1. https://www.hicxsolutions.com/building-software-vs-buying-software-vendor-debate/
2. https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/delivering-large-scale-it-projects-on-time-on-budget-and-on-value
