Before embarking on an in-house software development project, consider the real risks and hidden costs that organizations often overlook.
It is not easy to develop software that really works and meets its objectives. Not all software projects are successful, and there is always a real risk of failure. All SasiaNet products are tried and tested and successfully running in multiple client sites.
Like individuals, each organization has its own unique strengths. It is best to exploit the known strengths. Software development is best left for companies specialized in that area, with a proven track record. When entities try to develop their own solutions through their 'IT Departments', they tend to deviate from their core strengths. Principles of Management, particularly Competitive and Absolute Advantage prove that they end up in losses.
Loss of key members of an in-house development team could jeopardize key projects. High staff turnover is a key issue in the entire IT industry. Losing key members to competition could lead to other unwanted problems. Software companies with their relatively higher numbers of staff are able to minimize and tide over the impact of loss of key personnel.
Maintaining a separate software development unit will have to accommodate appropriate redundancy for possible staff turnover. Annual cost escalations in terms of increments, bonuses and other fringe benefits would surpass the increases in cost of maintaining software by an independent specialist software entity. Software companies are able to pool their resources and provide a higher level of service at a lower cost, due to economies of scale.
The initial subsidiary objectives of re-selling generally does not work due to lack of independence. Potential customers of software products will happen to be competitors in the areas of core business operations. Therefore, competitors will be reluctant to purchase software from such entities, fearing that the other party could gain unethical benefits.
The product may not see much technological advancement as your IT staff may not have sufficient resources for dedicated research and advancement of technology platforms. Software companies on the other hand have to keep themselves abreast of the latest technologies for mere survival.
The in-house developed product will not benefit from the combined input and feedback of a broader market, as feedback is always limited to one entity. Software development organizations keep improving products in order to compete with other software products, thus products keep being improved and feature-rich.
With in-house software development, organization structure hierarchies and other related factors could interfere with and suppress genuine business goals. With an external software company, such conflicts which are detrimental to an organization's operations and activities do not arise.
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