Development From Scratch VS Boxed Solutions: What is More Profitable?

Development of websites, mobile applications and other IT solutions no longer takes as much time as before — from one to two years. Big brands, for example, banks, are setting the bar high for the competitors, and release two or three important updates each month.

There are two ways to develop such information products. The first, is a quick launch of a “boxed” solution (for example, Salesforce CRM). The second, is a creation of a product from scratch. By the way, it is important to remember that the information market tends to reduce the time to market — the average mass market product release time.

For whom is it more profitable to use the “box” and for whom an individual solution? Alexey Florinsky, CEO of the SimbirSoft global IT-company, will help us answer this question.

Where the Choice Begins

Choosing an IT-system, firstly, it is important to determine how it is going to solve standard tasks. For example, if you need a CRM, sales management system, you find many ready-made solutions on the market. The adaptation of the system does not take much time (from two to four weeks on average, depending on the characteristics of the project), unlike the development from scratch.

If you need a highly specialized solution or a highly secured system designed for a high load (especially IT banking products or civil service sites), it is advisable to look for the individual development. However, you still can speed up this process by using the ready-made solutions at various stages.

Let’s consider, how the search and selection of the information solutions are usually fulfilled.

Lost in Choice

Having its goals and objectives formed, the business, as a rule, begins searching for possible solutions or contractors on the Internet. For example, we once worked with a company focused on omni-channel, which was looking for a product to control all channels of interaction with the client. For the initial search of the market solutions, the following keywords were used: “contact center” and “record calls, call from profile”.

As it can be seen in the screenshots above, even with a small number of product requirements, a company faces myriads of developers offering their ready-made solutions or their services. If there are more requirements, it becomes too difficult to understand whether there is a suitable CRM system on the market.

In our client’s case, we have helped to determine which modules were needed in the CRM to solve the business objectives:

1. Customer card.

2. Communication history (correspondence by mail, SMS, commentaries, tasks).

3. The last activity (pages visited).

4. User data storage (calculations, orders, requests).

5. Customer segmentation, segment management.

6. Deletion of personal data on request.

7. Integration with helpdesk.

8. Integration with unisender.

9. Integration with sms.ru.

10. Communication with the user.

11. Sending SMS.

12. Call recording, possibility to call from profile.

13. E-mail.

14. Integration with social networks.

15. Correspondence in messengers.

16. Maintenance scripts.

17. Triggers.

18. Events automation.

19. NPS.

However, choosing a CRM and setting up all functions is rather a time-consuming and a very delicate process. Why a consultation with specialists would be the best solution in such a situation? An experienced company with extensive technological expertise will help you to understand the “hidden” processes and make your CRM a really convenient business tool.

First of all, the expert company helps to assess what tasks your system will solve (typical or not), what ready-made solutions exist on the market and how they can be used. Boxed solutions may suit you if they cover at least 30% of all your requirements.

Consider what the requirements and capabilities table might look like:

Next, we estimate the adaptation value of each solution. It should be borne in mind that a significant revision of the functionality of the “box” (70% or more) is often seemingly even more laborious (you need to understand the logic laid down by the author, and adapt the solution the way its working process will not be disturbed).

For example, the first solution fits an average of 35.5%, and the other two — 33.5%.

The calculation shows that the boxed solution №1 is more profitable considering the fulfillment of the requirements. In spite of this, almost all the above options are more or less similar and suitable for the customer. The reason for that is that we initially have received quite standard requirements. However, there are projects in which the percentage of the requirements met does not exceed 30%.

“Box” and Development From Scratch: Best Choice Criteria

While choosing a development method, we evaluate not only the necessary functions, but also the other parameters, for example:

• special conditions (e.g. if cloud solution is required);
• architecture and technology compliance with system load requirements. Thus, for the highly loaded banking system, which contains more than 50 million contacts, we settled on an individual, not a boxed solution.
• the cost of a box solution (including the monthly fee). For example, for small and medium-sized businesses there are solutions that cost from $2500 to $5000 (plus a subscription fee of $500 per year). While in banking and some other industries there may be required boxed solutions that cost $100 000 (plus a subscription fee of more than $15 000 per year, without counting the cost of plug-ins).
• costs associated with the use of a particular technology (for example, the prevalence of the market, the cost of working hours of the developers, etc.). These calculations are necessary to estimate the costs of further support and development of the system.
• if there is any personal data encryption (in the case of a cloud solution), the need for open source code and the possibility of further development of the solution.

The advantages of the boxed solution are fast integration into the business processes of the enterprise, ready user interface and integration with various services, saving on the stage of analysis and design of the basic entities of the system. Disadvantages — limited compliance with the business requirements, the need for future improvements, the availability of subscription fees.

Development from scratch is suitable for companies that:

• do not want to depend on the supplier of the boxed solution and adjust to the limitations;
• have highly specialized tasks that are not even covered by 30% of the ready-made solutions (for example medical companies);
• have a high load (for example, foodtech segment or online retail).

Some companies are wary of ready-made solutions, not knowing how to combine them with new modules or how to change the design, for example. Based on our experience, we can say that this is not a problem — universal solutions are freely integrated with other systems. Turning to the “box” or individual solutions you just get a few services you need that communicate with each other. The interface could also be changed. Therefore, using the ready-made solutions in development is a good opportunity for your product release.

Let’s consider the example from our practice. We received an order to develop an ERP system for a medical organization. This task was divided into two major blocks:

• first of all, the CRM module with the simplest and convenient interface was required, because at the time of development the doctors preferred to make records the old-fashioned way, on paper;
• it was also necessary to develop a medical module for doctors and administrators, that will reflect the unique business processes of the clinic.

At the same time the solution should not depend on the vendor, because the client wanted to distribute it on their own.

After analyzing the requirements and implementation options, we found that most boxed solutions have an overloaded interface. Others did not allow further expansion of the system functions to the extent required by the client. In our case, the best solution was to run a CRM based on SimbirSoft’s own developments.

How to Speed up the Release

It is a rather common situation when the company wants to get a working solution as soon as possible — in one or two months. In this case, we generally recommend that you run the product step-by-step. How can this be done? First, we release a reduced version of the product with minimal features (MVP), which helps to perform the most urgent business tasks. Subsequently, the functionality of the project is expanded and refined. This approach allows you to reduce the time to market and get the first result in a period of one month, depending on the characteristics of the project.

It is advisable to speed up the release if one or more of these conditions are met:

• if your product is ahead of the competition’s;
• if you intend to increase the market share of the product;
• if the product is promoted in a competitive market (there are products, analogues or substitute products, that share consumers);
• if your product is actively used by a large number of consumers.

In the example of our clients, we observed several models of changes that can accelerate the development and are widespread, in particular, in the fintech segment:

• financial companies change the organizational culture, restructuring the structure of production;
• they divide development into small teams;
• they attract IT companies to outsource the development process.

The use of these models can reduce the time of product release by 2–2.5 times. Cooperation with experienced IT-companies is more effective for banks because that allows them to design and release the product faster and provide for the possibility of its development. At the same time also, the functions to which the consumers responded are honed, which means that the bank gets an advantage over its competitors.

About us: SimbirSoft is a modern IT-company, specialising in the implementation of end-to-end software & mobile development projects. Within 19 years, we have developed more than 620 IT solutions: enterprise automation systems, highly loaded systems, mobile applications, Machine Learning & Data Science solutions, embedded software. Today we collaborate with many international companies such as ABBYY, Burger King, Intland Software. Our full portfolio is here.

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