SmartCompany, July 19 2016
Today I saved my small business client $90,000. Not bad when the competitor was going to charge $100,000.
Correct. I got what might have cost my client $100,000 down to around $10,000. And not a single cheap overseas programmer was used in the process!
Regular readers of this blog will know how I did it but most smaller business operators may not.
The answer lies in that well-known property and software question: “to build or to buy”.
It’s really pretty simple.
Standard functionality requirements
My client wanted a website with a range of functionality requirements, for example, an e-commerce software that could sell downloadable items. Their website platform also required an ‘extranet’ (password protected area), CRM (Customer Relationship Management system), an EDM (electronic or broadcast emailer) and a number of pages of content amongst other things.
From a technical perspective, this was really a no-brainer. There are lots of website platforms that offer these capabilities as standard and others that allow you to ‘plugin’ those that don’t. These options are what is know as the ‘buy’ option. You simply ‘buy’ the pre-built technology to minimise the cost of expensive development labour.
And this is where my competitor fundamentally got it wrong.
Their six-figure quote was based on a significant amount of time creating the functionality either ‘from the ground up’ or by cobbling together disparate technology features. When I say ‘from the ground up’ I mean building or hand-coding from scratch, rather than utilise pre-built software components.
In other words, they went the ‘build’ route.
When to build
It’s not that there’s anything wrong with the build route. Larger companies do it all the time when they either have a unique functional requirement or they want to fully ‘own’ the resulting website functionality.
But they pay handsomely for that luxury because much of the functionality has to be ‘hand-coded’ or developed from scratch.
When explaining these options, I always use the MYOB analogy. Why would you go to the considerable expense of building a MYOB-style bookkeeping system for your business when MYOB already exists for a few hundred dollars a year?
We tend to be a bit blasé about software these days, forgetting exactly how many human hours went into its development. It’s not until you obtain a price on custom-developing your software or website that you get an idea of exactly how much labour is required.
Of course I did a sanity check before I gave my client the good news.
Testing the theory
Did the ‘bought’ solution contain all the required functionality? Yes, and then some. Did they need to ‘own’ the resulting platform? No, a ‘leased’ or ‘licensed’ solution would be fine.
Were there any plans to add new functionality to the website in future? Not that they could imagine.
Naturally the client became very enthused when I told them how much the ‘bought’ option would cost them via the ‘build’ route.
They suspected that the other quote was excessive, but weren’t familiar enough with the methodology or terminology to argue the point with its provider.
The golden rule
But there is a golden rule around this situation that every smaller (and even larger) business operator should understand.
And that is: if you have no unique functionality requirement, there is no need to ‘build’ your website or software solution, because that functionality will already be available for a fraction of the build price.
A pricey can of worms
Then of course there’s the ongoing maintenance. If you go the build route, you have no option but to pay the developers every time you need to improve or alter the functionality.
For example, if it’s a website, you will need to bring in your developer every time web browser providers (i.e. Firefox) upgrade their browsers.
Every single browser upgrade fundamentally alters your website functionality, so you need the developer to alter your website and/or platform to make the necessary technical adjustments to allow it to work on the upgraded browser.
With ‘bought’ websites or platforms, this simply isn’t necessary because it’s covered by your ongoing license fee which is often bundled with hosting. The cost saving from this factor alone can be very significant.
So before your have your next website or online project built, just be sure to understand whether a bought solutions will do the job for you.
You will save both a lot of money and heartache if you do.
In addition to being a leading eBusiness educator to the smaller business sector, Craig Reardon is the founder and director of independent web services firm The E Team which was established to address the special website and web marketing needs of SMEs in Melbourne and beyond.