Return on Investment (ROI)

Within the digital asset management (DAM) community, return on investment, or ROI, is a hot topic. Businesses know they need a DAM, but clearly showing ROI to upper management isn’t always straightforward. Consultants and analysts have deconstructed the debate over and over. At WebDAM, we often hear a slightly different perspective – not so much a debate on ROI, but rather a case of paying an outside vendor for a solution (“buy”) vs. internally developing and maintaining a solution (“build”). DAM is becoming business-critical thanks to the exponential increase in digital media and most companies recognize the need to invest in it. These days, companies spend their time exploring the different ways to incorporate DAM. Should they create an in-house solution with complete control over features, workflow, and interfaces or should they use an outside vendor and focus solely on their core business? That’s the true dilemma facing companies these days – hence, buy vs. build.

Upon first glance, the “build” option seems to be a better way to go. After all, it’s a tailor-made solution developed and maintained by a company’s internal staff for total control. But upon closer inspection, choosing to “build” doesn’t quite seem as practical. Here’s a look at the key differences involved between “buy” and “build”:

Upfront development cost

Build: Building any type of software means an upfront investment in hardware requirements and software development – especially internally developed software designed to meet company specifications. It can be very difficult to estimate the total costs involved in development of a sophisticated software application, such as a DAM, especially when you consider the logistical side, such as facilities and personnel (project managers, engineers, testers, etc.).
Buy: Purchasing DAM software involves licensing fees or subscription costs (SaaS) and often a setup or installation fee. The costs are well-defined and known upfront.

Upfront development time

Build: Many companies quickly recognize the downside of development time. After all, it’s not just about writing the application’s code and testing it. There are meetings upon meetings for planning and design, proof-of-concept development, hardware/software coordination – all of that before the application goes into its first round of testing. Each stage could take anywhere from weeks to months, and the launch version could be several iterations away depending on the number of critical bugs discovered.
Buy: When you buy a DAM solution, the product is ready and the only requires a time investment for training.

Ongoing software maintenance

Build: A software application becomes outdated the moment it is released. That’s why updates and patches are released – not just to fix bugs, but to improve functionality and update features. For internally developed software, that means overhead cost for development, testing, and design as software becomes stale, systems evolve, or hardware demands grow. If a company doesn’t invest in this, it could lead to further problems down the line, just like a car that’s gone years without maintenance or oil changes.
Buy: When you buy DAM software, updates and maintenance are the responsibility of the provider. SaaS solutions often have the added benefit of rolling out new releases without additional licensing fees.

Software maturity

Build: Software takes time to reach a stable level, especially internally developed software. The term “mature” software applies when the application has a minimal amount of bugs, but this can take years of development and maintenance to achieve. It’s a continuously moving target that requires the effort of many engineers to overcome.
Buy: When you buy a DAM solution, it should arrive with a mature level of quality (assuming it is published by an established, reputable vendor).

Real-world issues

Build: Companies reorganize. Budgets get cut. Software engineers move or change jobs. When only a handful of people hold the keys to your internally developed DAM solution, any of these changes can represent a seismic shift in your application. How will you make the appropriate updates when budgets don’t allow for it or the lead developer leaves the company? These situations are impossible to predict and almost as difficult to adapt to.
Buy: When you buy a DAM solution, the provider’s business focuses on that product. It’s not merely an internally developed tool, it’s their source of revenue. Thus, significant resources will continue to be devoted to it regardless of personnel moves or organizational structure.

When you put it all side by side, the benefits of buying over building become clear. Of course, the built solution is totally customized, meaning that it is tailor-made for your internal workflows (assuming IT delivers upon expectations); there’s no need to shift or augment the way things are done. Bought solutions may require a company workflow to slightly adapt, and while this might provide an initial hump to overcome, staff members often prove more than capable of integrating a bought solution into their everyday tasks. Thus, when you lay out all the pros and cons, purchasing a DAM system can save time, money, and resources when compared to the effort required to build an in-house system.