12 October 2022 Reading time: 8 minutes

The pain of choosing software: when it is better to create from scratch, and when - to buy a ready-made solution

The pain of choosing software: when it is better to create from scratch, and when - to buy a ready-made solution

 

ISPSystem

Pavel Guralnik, General Director of ISPsystem, shared his opinion with RSpectr on the advisability of buying software from a domestic vendor and in-house development.

The question of when it is better to create your own software and when to buy a ready-made solution is faced by probably every second software client in Russia. And in 2022, with accelerated import substitution and unpredictable external circumstances, the issue is particularly acute.

Against this background, many domestic representatives of the IT industry are thinking about developing their business in the direction of their own in-house development. However, this path has its own difficulties and risks, in particular the high economic and time costs, the non-core activity of the organization, and the lack of an experienced staff of specialists.

RSpectr found out what domestic IT industry representatives think about it, including ISPsystem. Below is the full version of Pavel Guralnik's comments to RSpectr's questions.


In what industries (cases) is it more appropriate to buy software from a domestic vendor, and in what areas is it more reasonable to invest in internal development, including the creation of special IT departments?

Recently, domestic vendors have been actively developing, there are more and more solutions, including specialized products for most industries. The need for software is met, but not all Russian vendors' products are 100% in line with their Western equivalents. In many cases, such similarity is unnecessary, because somewhere the functionality was redundant or the customer needs other features of the product than those of its Western counterpart. Now the development industry and domestic vendors are actively progressing, improving their solutions, and in the vast majority of cases, it is more appropriate to buy software from a domestic vendor.

Of course, there are some specialized programs and software that are either not currently available or do not fully cover the needs of clients. However, if a niche existed, and there was some Western equivalent in it, and now it has been vacated, and there is demand in it, then most likely there is already one or a number of domestic vendors who are trying to meet that demand.

It makes sense to invest in internal development when it is required by the critical services of the company, which directly affect its business processes. For example, if we are talking about banking services, service portals - they are unique and require internal staff to maintain, develop and update. These solutions are not scalable to the market, nor are they initially produced for the individual clients and its needs. If such a solution is developed by a contractor, then in the future it will be necessary to develop and maintain this solution, and in this case, companies will have to create special IT departments. If we are talking about software for broader use, such as virtualization, operating systems, applications for engineering, then it is certainly worth investing in domestic vendors who will implement effective developments, expand the product and the high-tech market as a whole.


What advantages, difficulties, and risks of developing your own software can you identify?

There are advantages to developing your own software when it is something individual to the organization, and no vendor can cover those needs. It is not a scalable product, other marketers do not need it, and it is critical to this organization. Moreover, this need itself is not covered by alternative solutions or a range of products - that is when the organization decides to develop its own solution to meet its needs.

The difficulties here are obvious: this is a non-core area for the organization; the company is neither a software developer nor a vendor. Accordingly, they need to grow competencies within that are not key to their business. The organization needs to adopt expertise in product development, risk management, quality control, team building and management, and so on. Therefore, as a rule, it is necessary to look at the market, to study who is already on it, who professionally creates the software that allows you to meet the need, and direct the organization's resources to its core business.


In that case, what are the pros, cons and risks of buying off-the-shelf software?

The advantage of such a purchase is that the company does not spend its resources on non-core activities. It buys a ready-made solution, for which the developer is responsible, while the latter undertakes to provide it to the organization in the form and quality required. The client gets a quality product at the output without any organizational and operational difficulties associated with the creation of the product. The risks of such a situation are that the product may not develop exactly as the client wants. For example, the client may need some functionality that is not demanded by all other market participants, so the vendor decides that it will not implement such a feature, and the consumer of this software will have to make some compromises and make a decision within the framework of what it gets from the vendor. This is quite often the case, especially if it is not some anchor client for the vendor, for whom the latter is ready to do custom development.


In general, which approach is better for the development of the IT industry?

Each representative of the market should be engaged in its core business - to do what it is good at doing. The development of software should be entrusted to specialized companies that will do it in a quality way and provide consumers with a finished, well-functioning product that meets their needs. There are many different solutions on the market now, and unfortunately, many organizations decide to do something on their own because some product from an existing vendor may not meet their wishes at the time. In the long term, this leads to the fact that the same products are duplicated in the market, they begin to compete with each other, and this hinders the technological development of the industry and the country. After all, instead of developing a well-established product of a good vendor, giving it room for more scaling and progression, many companies start making their analogues. Eventually, there are five similar solutions on the market from organizations that do not know what to do with these solutions next, because it is difficult and expensive to maintain the product internally. They start to introduce it to the market, and as a result, as many as five organizations spent the same amount of time and different amounts of money on the same product, although they could have been doing something profitable, developing their technology and bringing it to an entirely new level.

Read the full text of RSpectr's “Software among aliens” article at their website You will find out the opinion of Russian representatives of the IT industry on when to buy ready-made software solutions, and when to engage in the development of your own.