“Should we buy or should we build our manufacturing production management software?”
This is probably one of the most common dilemmas facing manufacturing managers since it is also a typical objection our sales team gets.
There is no simple answer since you will be comparing two dramatically different realities, but a great starting point would be to access your company’s immediate and long-term needs and goals. Ask yourself not only if you CAN do it, but also if you SHOULD do it.
We have put together some common considerations which our sales team face daily, in order to help you to organize your thoughts and answer the questions above before you start searching for a solution to manage and track your production:
- Time to market
- Resources and Expertise
- Features and Functionalities
Time to market
Answering this question “When do I need a manufacturing software?” might itself solve this dilemma, since a supertight timeframe will give you the answer.
Do you need a production management software right now? Do you want your team to start using it immediately? Or do you have enough time to develop it in-house, considering all the delays that come with a development process?
If you decide to go with a third-party manufacturing software to track and trace your production, it can probably be set up for your own reality in minutes and integrated with your apps and resources in days. Your software partner will be responsible to ensure the solution is ready when you need it, with a reduced chance of delays.
An in-house solution will take your team to fully dedicate several months to develop it. According to a VMWare survey the average medium-sized IT project in 2014 took five months to complete, and 17% of respondents reported that projects took them an average of 7-18 months.
In-house projects are also known by exceeding the planned timeline (and also the budget, but let’s talk about it later).
If the timeframe hasn’t helped you on this decision-making process, the second question you should ask yourself is: How much can I spend on a manufacturing software? Is it cheaper to buy or to build a production management solution? How much will it cost me to maintain it?
If you decide to go with an in-house solution, you must know that pricing is rarely predictable. Large IT projects are known for running over budget 45% of the time, while some of them end up not delivering the features initially required. You must also consider your opportunity costs: If your existing resources are fully dedicated to building and maintaining a new manufacturing software, what will they need to stop doing? And if these are vital tasks for your company, who and how much will you have to pay to handle it?
When considering the cost of third-party software, you know exactly what your costs will be, either for development or maintenance and support in the future. Some companies have fixed values, some others have a variable cost based on the number of managers/users you need and the features you will be using, but that is exactly what you will be paying and this subscription covers regular maintenance. Check our pricing page to see how our pricing model is built.
The end result with a third-party solution is almost always a lower upfront investment and a lower recurring cost, contrary to popular belief that building software in-house will pay for itself.
Resources and Expertise
Do you have enough resources and expertise on your team to build a software that is even comparable to the solutions currently available in the market?
If you trust on a software provider, you get both the technology and the expertise from a company which core activity is exactly delivering that kind of solutions to companies like yours. It can come with dedicated support or a customer success team, which will help you on the process of implementing and fully using the solution. These experts not only know your needs, but they also know how the software works and they have helped many companies like yours and have learned good practices regarding manufacturing software utilization.
An in-house solution, even with a team that has the knowledge to make it happen, will probably be a one-time event which falls out of your core expertise and competencies. Hiring someone specifically to manage the solution is always an option, but a costly one – If you can find one specialist that is available and wishing to work for your company.
It’s also important to consider the environment in which the software is developed. A company which is fully dedicated to developing a great manufacturing tool for production management relies on years of experience, knowledge, trial, iteration, and partnership with many related companies and customers with important insights that make the solution grow. An in-house solution usually can’t count on that much expertise to support its evolution, and even if it does the job right, it doesn’t come with a team committed to your success.
Features and Functionalities
Do you know an existing out-of-the-box solution that is able to meet your needs? Can they be customized to do it?
After comparing and evaluating the manufacturing software providers which you think might fit your organization, consider the flexibility of each solution and how it can adapt to your business. If it still misses some features that you would like to have, can it be negotiated with the company? Can you complete it with another tool? Are they really important?
Often off-the-shelf software can’t accomplish everything just the way you thought a solution would, and one of the biggest benefits of an in-house solution is exactly that freedom and flexibility since it would be created only to meet your own goals. However, please keep in mind that studies show that many IT projects end up falling short of their initial ambition, sacrificing features over usability or the completion of the project.
The likelihood and potential impact of something going wrong is also important. Either you decide to build a software in-house or to buy it, you will have to manage different risks. An in-house software has the risk of not returning the investment by not delivering the needed features and becoming part of the high percentage of IT projects that deliver late or not at all. If you are counting on a manufacturing software to track your production or to help you in Quality Management, the risk will probably be higher.
If you decide to buy it, the risk is usually lower and the main one is that you can’t fully control the environment of the solution and don’t have access to the code. In case something goes wrong you will have a committed team to help you to fully fix eventual bugs on the software. You just need to call for support or create a ticket notifying the team about the bug, and they will get back to you as soon as they solve it.
These are the questions that we consider that can guide you and we hope that this blog post helps you on the call of developing or buying your manufacturing software for production management.
At Prodsmart we chose to have close interaction with our clients and give them enough information for a correct decision. After a demo, you can try our solution for free for 14 days before committing to a final decision. If you want to check if our solution can fit your reality, sign up now and start a free trial in less than 10 minutes.