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New Business Trends  Internet Business
Application development is a safe option for the SME
As the effective use of technology becomes more important in the highly competitive small and medium sized business (SMB) market, more companies are questioning the wisdom of buying off-the-shelf software. In particular, SMB business leaders are asking how they can gain competitive advantage by using the same applications all their competitors are using.
Added to this is the question of functionality. When purchasing a software package one may be impressed by all the features it offers, but the reality is that businesses use at most 10% of the features in their applications – although they still pay for the whole package.
In an effort to make every penny count and to afford themselves an unfair advantage in the market, more SMB’s are therefore tuning to the idea of developing their own software – or paying a development company to produce systems tailored to their specific needs. And what could be better than a flexible application, designed to work the way the company works instead of making the company adapt to mass-marketed software!
And it need not cost the earth. The purchase price of off-the-shelf applications is only part of the total cost of ownership. Annual license fees and maintenance fees need to be considered in total cost of ownership calculations. And when all these costs are tallied, companies will find that developing applications is not as expensive as it is reported to be.
Of course, as in every business decision, more important than cost are the returns. Off-the-shelf software allows for some customisation to the user’s requirements, but most of the system is defined according to the software vendor’s specifications – and these are often designed for the US or EU markets. Developing one’s own applications ensures the software does exactly what the company requires and is flexible enough to be changed to meet changing market conditions.
Another argument against development is that the developer may go out of business or be unable to continue supporting the software for some reason. This is easily dealt with by ensuring the source code is stored in escrow with a third party. That way, should something happen, another developer can take over. The same won’t happen when a proprietary vendor decides it will no longer support a product or is acquired by another company.
Development choices
Once the decision to use software developed for the company is made, the next step must be to decide on what programming language to use. The most popular choices today are to either use a Microsoft language (such as C#), or Java.
When using C#, companies will once again be stuck with a bill for licensing fees, making it an expensive choice. On the other hand, many companies choose this route as they feel they are already using many Microsoft products and developing on the same platform makes sense.
Others prefer to use Java development environments because of the versatility of the language and because it has been in use longer than C#. It is also portable between systems and development environments, a factor that becomes important for fast-growing concerns and in acquisitions. Here again though, license fees are payable.
A third alternative many companies are examining today is to use Java, but within an open source development environment. Open source development should be less costly than the first two options, but there are pitfalls.
The first pitfall is the idea of “free”. Open source is not free. One may be able to get the application free and avoid license fees, but you will probably need to pay more for good skills. Moreover, you will have to maintain the systems yourself.
Additionally, the second pitfall is copyright. While the license for open source software may be free, the license conditions often insist that any changes made or new components developed (which may include your competitive advantage) must also be released as open source. If you’re developing your own applications for competitive advantage, this may not be the option to look at. Proprietary technology has its price, but you retain the rights to your own intellectual property.
Standard software bought off the shelf certainly has its place in business today, but in the SMB market companies need to focus on keeping one step ahead of their competitors. Having your own business applications designed and built for you is a flexible, cost-effective solution that will ensure your organisation’s technology investments support your business, not a software vendor’s business and more importantly, mitigate the risk involved in traditional technology implementations.
Malcolm Rabson, MD of Dariel Solutions
About Dariel Solutions
Dariel Solutions is a South African professional IT services company and systems integrator. Based in Johannesburg, the company focuses on the development and deployment of bespoke applications and customised integration services.
For more information please visit the Dariel Solutions Website on www.dariel.co.za
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