Buying COTS VS Building In-House

The following is a set of guidelines (not rules set in stone) that help to understand better when to build software in-house VS buying a commercial of the shelf (COTS) software product. These guidelines are drawn from the experiences of several colleagues & friends I have work(ed|ing) with:

1. If a software is core to your business, BUILD IT. Also, one of the reasons not to buy COTS when it is core to your business — your competitors can buy the same software solution you are using. Hence, you lose your competitive advantage
2. If you are willing to change Your business processes to match the COTS, BUY IT
3. If there is COTS and you have to do significant customization that doesn’t match their model, BUILD IT
4. If there is COTS and you have to do insignificant customization within their model, BUY IT. If, while trying to customize you realize that the effort is much more significant than anticipated with less of a match to your business, BUILD IT
5. If it gets your product out the door significantly quicker and starts your business (signs up customers, generates revenue, etc) BUY IT. If it wasn’t too expensive or no longer adds value to your business, come back around and BUILD IT later
6. If other services that are core to your business have to integrate with COTS, and evolving this integration is going to impact your ability to serve business needs, BUILD IT