Thinking about integrating your disconnected employee data applications? You’ve probably heard that you can cut costs by building your own program to integrate your systems instead of buying a third-party application from someone who doesn’t even know your setup.
It’s a good question worth considering. It would be foolish to spend more money on a simple solution that you could custom-build yourself. But before you decide whether to build or buy your integration application, be sure you consider all of the costs.
The DIY approach to software works well for simple projects, but the more complex the requirements, the costlier the project becomes. And you may find that the greatest costs aren’t related to initial development. By the time it’s all said and done, building your own software solution may become costlier than you imagine.
Does It Really Make Sense to Build Instead of Buy?
Before you commit to developing an integration application in-house, here are a few questions you should carefully consider.
What’s the real cost of development?
When you calculate your costs for development, don’t do what most companies do. Most organizations ask their developers for a time estimate for the project, add a bit more for unexpected issues, tack on costs for purchasing tools or devices, and crunch the numbers.
But they fail to consider the exploratory time that’s spent investigating and understanding the issue. Countless hours go into discovery before the first line of code is written. They also forget to consider the non-developers on staff who will be pulled away from their own work to collaborate, advise or beta test the software. Once you introduce these personnel, you’re bound to run into scope creep and endless rounds of miscommunication and rework.
According to one calculation, the cost of developing just one numerical algorithm is $9,500, or 1/8 of a typical programmer’s annual salary. In 2013, a survey of IT professionals revealed that over 50% of developers spent more than three months and over $50,000 developing certain types of custom applications. Almost 25% spent over $100,000.
But even after you’ve developed and implemented the application, you’ve only just begun the project. Because your application is integrated into the life of your organization, your staff members now depend on it to do their daily work — forever.
Building software isn’t a one-and-done project. Be prepared to continually maintain, fix, update and upgrade your new product. Your users will find bugs almost immediately. Did your project calendar include post-release cleanup and support? What about updates and upgrades to maintain compatibility with the systems your application integrates with? Can you afford to pull developers off of billable projects maintenance and upgrades?
FLSA regulations are continually being revised as well. Can you keep pace with changes in federal regulations? You’ll surely incur a hefty cost if your integration application is out of sync with FLSA rules!
What are we missing out on?
Not only are there costs of investment when you build your own integration software, but you’ll be taking on opportunity costs as well. When you divert your staff to non-core projects, you’re limiting your ability to add revenue or build your business. Are you prepared to miss out on those opportunities?
As you consider this question, determine what your urgency and need is. If this is a low-priority project that you can interrupt to tend to other needs, your opportunity costs may not be that significant. But you could be waiting for many more months before the application is released. On the other hand, if you need an integration solution immediately and other projects will have to wait, then you may be taking a significant hit by building your own application.
Developing a robust integration application takes hundreds of man-hours away from your development team’s primary work. Before you begin the project, decide what your priorities are and how much time you’re willing to divert from core functions.
Does this fit within our company vision and priorities?
Many companies make the mistake of chasing opportunities that don’t align with their vision, goals or priorities. Inevitably, the opportunities become albatrosses that weigh the business down. These projects end up draining resources that should be used to drive the organization onward and upward.
Also think about whether developing an integration application fits your company’s core competency. Are your developers already equipped to handle a project like this or will they need to learn new skills? Is this the kind of project your company tackles every day, or is it altogether different? If this project has a steep learning curve for your team, consider very carefully whether it makes sense to invest into the effort.
Does it make more sense to divert resources to build your own integration solution or invest in your core offering?
Build a Better Business with a Third-Party Integration System
Buying a thoroughly tested, robust integration application can be a smart business decision that frees you up to do more work and saves your company more money in the long run. Not only is the total financial investment less than in-house development, your staff are never diverted from their core responsibilities.
But not all third-party integration applications are created equal. To be sure you’re getting the best savings and best reduction in your own time and attention, look for an integration system with these features:
- Automatic updates. When FLSA requirements change, or when your integrated applications are upgraded, make sure your integration system is capable of automatically updating as well. That way, you’re always compliant and always fully integrated.
- Custom implementation. Get an integration system that can be built around your unique pay policies, schedules and processes.
- Automation. Automation saves even more time by scheduling your payroll processes to run in the background without any manual work on your part.
- Find out how IDI can help you cut costs and reduce manual data entry.
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