Magazine article CMA - the Management Accounting Magazine

Still Pondering Make vs. Buy? - Check Your Assumptions

Magazine article CMA - the Management Accounting Magazine

Still Pondering Make vs. Buy? - Check Your Assumptions

Article excerpt

I continue to be surprised by the reactions I get when I recommend to organizations that they first look for a software package to meet an application need and consider custom development only as a last resort. Sometimes it seems that there is a sense of letdown -- a kind of resigned acceptance along with the secret hope that no package will meet the requirements and thus that they will be able to get exactly what they want, without compromise. At other times there is outright opposition -- the executive who did not want to give up control of the system to "outsiders"; the company that insisted its requirements for a fairly standard application were unique despite the evidence of a number of packages widely and successfully used in the industry.

I suspect that much of the resistance is based on a perception of commercial software that originates in the time when the third-party software industry was young and packages -- often awkward, inflexible and relatively expensive -- fell far short of what could be achieved from custom development. But things have changed. Today's world of packaged software is as different from that of 20 years ago as the Japanese consumer goods industry is far from its state during the 1950s. If the concept of packaged applications is still facing a hard sell in your organization, maybe it's time to check your assumptions. Here are some of the more common ones.

The fit with a package should be close enough that we don't have to alter our operations.

This used to be the conventional wisdom, but the fact is that in many organizations, the business processes themselves are in need of extensive restructuring. Modern software packages are often designed around "state-of-the-art" business concepts and can provide a natural means of accomplishing the transition to a more effective, streamlined mode of work.

Packages are too restrictive and inflexible to meet the changing needs of our business.

Successful packages typically have many more features than are needed by any individual user, and also undergo continual enhancement in response to customer requests and legal requirements. A company may never hit the limits of functionality in some of today's large commercial software packages.

However, vendors recognize that many customers want to "do their own thing" and typically provide "user exits" which in effect allow them to add their own custom code, without changing the package. …

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