Internal Software Development: Pros/Cons of Building Internal Tools

Internal software development can be a powerful tool for businesses, especially if you have specific needs that widely-available software can’t address. This article will explain the advantages of a company taking an in-house approach, and whether the negatives outweigh them. While it’s not the right choice for every company, the benefits are hard to ignore.

Here are the main reasons to consider internal software development and some reasons to think twice.

Pro: Customization

Internal software development gives you the highest degree of flexibility and customization. External providers focus on providing a standardized experience that won’t necessarily match how you do business.

It is especially valuable in businesses and industries with non-standard requirements, including startups looking to experiment with new solutions.

Moreover, internal developers can also help iterate the software until it reaches its best form. For internal development, creating reliable, quality software often involves creating one version, getting feedback, editing it, and releasing updates until there is broad consensus on its overall performance.

Sometimes, this feedback will go significantly outside of the original project specifications. Internal developers have the flexibility to customize the software in ways that external companies won’t (at least, not without charging you a lot more for the result).

Pro: Internal Knowledge

Internal software development lets you benefit from internal knowledge about how your company works. That includes everything from company structure and permission setups to interfacing with other software. Internal knowledge is also valuable for fixing issues and having the people with the most product experience.

Few people are better at adjusting code than the people who wrote it to start with. Creating software is still as much art as science, and there are often many ways to fix a problem or complete a task. The more internal knowledge your company maintains about the software, the better off you’re going to be.

Pro: Better Communication vs. Outsourced Solution

Internal software development usually allows better communication than outsourced solutions. Since the developers work for your company, you can talk directly with them as they work on the code and help iterate the software until it’s in the optimum state.

Similarly, developers can engage with different parts of the company to get feedback and information on what they need from the software. One of the biggest missteps companies make when creating tools is not consulting the people who are going to be using them.

By getting and applying this information as early as possible, internal developers can create software that works for your unique needs.

Pro: Potentially Less Expensive

Developing your software internally can be more affordable than outsourcing it, especially if you already have a software development team. While external developers like to claim they’re cheap, the truth is that most companies don’t know how much it costs to develop internally.

Con: More Expensive for Staff

While internal software development can be more affordable, it may also be more expensive. If you don’t already have a team in place, your costs include recruiting, hiring, and training your team. In addition, there is an opportunity cost at play here, as every day spent training the team is one you’re not spending developing the app.

Developer salaries for software development start at around $60,000 and go up quickly from there, so it’s important to be sure of your plans before you expand this way.

Con: Once Software is Complete, You Have To Find a New Project

Getting the best value from a team of developers usually means finding more projects. If you hire a decent team for a single project, you may not get a good return from them.

In cases where you only need one or two simple pieces of software, it’s usually easier to contract it out to someone else.

Con: Staff Might Need Consultancy for Complex Software

Your staff may need to consult with each other on using complex software. For that matter, most internally developed software is going to be complicated. If it’s something simple, chances are there’s existing software that can do it, so there’s no point in spending time and money duplicating that.

Training is necessary for all software, but high-quality tools from external developers often come with an option for mentorship and onboarding by experienced teachers. Taking this approach can be significantly more effective than trying to teach people or creating a lesson plan internally. Hiring a teacher for your company is another expense.

Con: Retention Issues or Knowledge Loss Can Lead You To Need New Tools

How many people know how to use the tools you develop? If you lose those individuals, you might have a hard time maintaining or using your software. Indeed, larger companies may have product managers who do nothing except manage the company’s tools.

The problem is that issues with retaining personnel and the associated knowledge loss can force you to develop entirely new tools to replace the ones you already have. That’s more expensive than most companies want to consider. You can mitigate it with sufficient documentation for the software.

Alternatives To Traditional Internal Software Development

Internal software development isn’t the only option to get new tools.

The most prominent alternative is external development, where you can contract the work out to another company or buy existing software. These paths can be expensive, but they often have the support of dedicated personnel who can fix bugs, develop new features, and otherwise make the software easier to manage.

Alternatively, systems like Basedash can help you develop internal tools without relying on excess coding. Like modern website builders, Basedash keeps the work under the hood to create an intuitive, user-friendly setup for a huge range of potential business tasks.

While it doesn’t have the pure flexibility of internal software development, most businesses don’t need that level of control. Even for companies that do need such help, Basedash can reduce the number of tasks developers need to code while retaining the other benefits of custom development.