As the CIO of a growing company, there comes a time when you have to make a decision: build software or buy software. Both options have advantages and disadvantages. It all depends on your goals. When you build technology, you’re sure it will do exactly what you want it to do. But it’ll cost you time and resources. When you buy an off-the-shelf product you have speed on your side, but, as a ready-made solution, it won’t truly suit your business needs.
At CP Kelco, it was time for us to make that decision.
To Build or to Buy: That Is the Question
If you don’t know CP Kelco, we’re a division of JM Huber. We innovate specialty hydrocolloid solutions, which are thickening agents used for food and beverage, consumer, and industrial markets in 100 countries.
A few years ago, we were pursuing new market opportunities while trying to increase operational efficiency and reduce costs. That’s the dream, right? The problem was, our ERP system couldn’t do it all. We still had operational processes needs that required solutions beyond our current software tools.
To support our sustainable growth, we needed a large integrated system to manage all the different operational systems and meet our everyday business needs. So, the question arose: should we build the extensions of our ERP system or buy a commercial off-the-shelf (COTS) product?
Weighing Pros and Cons: Finding Plan C
At CP Kelco, we historically didn’t do in-house development for three main reasons:
- Development and maintenance costs are high
- Development takes too long
- There’s always a high risk of obsolescence.
For those reasons, whenever we had a business challenge and needed a new product, we would buy it from a third-party (plan B). But that approach wasn’t ideal either. Sometimes, we would only need about 30% of the product but had to pay for 100% of it. That’s pretty frustrating. It’s like we only needed a small bolt, but the only option was to purchase an entire spaceship.
Still, we considered expanding our ERP with a COTS product. But that would also require an implementation partner and we soon realized that going this route would lead to an over-engineered solution that would be too slow and too expensive to maintain.
We needed to find a plan C: an agile solution that would simplify and automate processes to dramatically decrease cycle times, improve our IT systems, and reduce costs. This way, we could build our own apps, while increasing efficiency and effectiveness throughout the whole organization but also identify and take advantage of new market opportunities. And we found all that in OutSystems.
No More Spaceships: Building Our Bolts With Low-Code
We were still worried about doing in-house development but using a low-code platform like OutSystems would mitigate our three concerns:
Low-code supports agile practices, so it would help us reduce maintenance efforts and costs.
With visual development, we’d be able to accelerate our development times.
OutSystems controls and compiles objects that get run and executed, which dramatically reduces the risk of obsolescence.
This way, instead of spending millions on buying and maintaining a spaceship that didn’t fully suit our needs, we could use OutSystems to build the bolts that we actually needed. And that’s exactly what we did.
We’re using OutSystems to build web and mobile apps that our ERP system in SAP doesn’t allow us to deliver, and seamlessly integrating them with our core system, complementing its capabilities. For instance, we’re eliminating extraneous spreadsheets users needed in the past. Our small development team was also able to simplify the SAP interfaces and reformulate screens while making them more simple for the business user.
Since then, we’ve built more than 25 new SAP-integrated apps, on an average of just 5 to 6 weeks per project that, until then, was cost-prohibitive using traditional development systems. In addition, we’ve also saved over two millions of dollars through process efficiencies in the business and costs avoided in software licenses, maintenance, and programming expenses. All this while slashing development time by a staggering 90%.
With OutSystems, we’ve been able to solve a wide range of business challenges that let us respond to emerging and unexpected opportunities. It allowed us to build applications at a fast pace and a low cost that meets our return on investment requirements, where COTS solutions do not. And because of our new proven agility, the demand for our services has skyrocketed with no end in sight. We’re now getting requests from divisions outside of CP Kelco.
So, when facing the build versus buy dilemma, take a hard look at the pros and cons of each approach. The answer might just lie in the right tool for the job.