Businesses often choose to develop their own software based on historical reasons that are not as valid today. In the pre-Internet 70s and 80s, banks started writing their own programs because they were the only ones qualified to do so. Some inhouse development teams have even grown to a size that overshadows the biggest global software companies.

When it comes to modern supply chain management (SCM) systems, however, it seldom makes sense to take on the massive costs and effort of building and maturing software inhouse. Instead, “Businesses who depend on their supply chains will realise a greater return on investment by partnering or contracting with specialists in this field,” says Neil McLaren, GM of VSc Solutions.

The difference that makes the difference

“One thing we hear frequently from customers is that their business needs are too unique for standard industry software,” says McLaren. “In all our years of existence, once we pop the hood on their operations, we find that, apart from a few outliers, business needs are usually similarly aligned within industry verticals, sometimes even across industries. We found, for example, a business need in the FMCG space which was 80% satisfied by technology from a completely different industry vertical.

According to McLaren that’s good news because software as a service (SaaS) is usually modular and one is likely to find a module which will immediately satisfy the majority of business needs without any development whatsoever.

“It is usually only a few unique requirements that define a business’ competitive advantage,” explains McLaren. “These days, good SaaS modules come with their own application programming interface (API) or some alternate method of passing data between themselves and other systems. So any extra features needed – usually far fewer than customers believe – can be programmed to integrate seamlessly with the central application suite or supporting applications.”

Instead of wasting cash recreating software that’s already been written by someone else and has undergone decades of extensive testing and refinement, companies should focus their resources on the few functions that are missing. That’s what modular design offers, and it’s the secret to a rapid, successful SCM implementation.

“Building software from scratch will very seldom give a company more control over costs or better satisfy requirements, despite what they have been convinced of by inhouse teams,” warns McLaren. “This is especially true if application design is neither their core competency nor their end product.”

Don’t try to recode history

A well written application with great performance satisfies a wide range of user needs literally takes decades of iterative design, production and optimisation. Video game companies quickly learned this lesson. They build their games on top of existing game engines, like Unreal Engine or Unity. These were initially released in 1998 and 2005 respectively and, with years of technological advancement behind them, are now the leaders in their field.

If game studios were to write their own engines today, it would take them another decade or two to reach the maturity and performance they can get straight away by licensing an existing engine. That advantage drives their products to market sooner without shedding the same blood, sweat and tears all over again. Any other approach would probably put them out of business.

Similarly, companies that write their own SCM systems from scratch won’t avoid the thousands of hours of bug fixes, code refactoring, performance optimisations, user complaints, project management, and the myriad of other concerns that go with it. In fact, they may find themselves in a spiral of unforeseen costs due to inexperience in this space.

“Supply chain companies or those with a supply chain function are unlikely to produce better software than an experienced software provider with expertise in designing user interfaces, sensible database schemas or the best security features, to name a few,” says McLaren. “And don’t forget, if you want the same flexibility and integration capabilities you can enjoy from a commercial product, you’ll need to design your own API or integration layer. But that’s an entirely separate discussion on architecture.”

For supply chain software companies, success in these areas comes not from their developer team’s qualifications but from strong development practices combined with years of experience in supply chain operations. It’s the perfect marriage between operational know how, industry experience and best of breed technical abilities.

Add SCM functionality the smart way

McLaren advises SCM companies to invest in commercial SCM software that can be implemented in weeks instead of years, starts delivering an ROI immediately, and provides the ability to be extended through integration layers. In addition, you have real recourse and sound service level agreements which may be missing when developing inhouse.

“By following the basic principle of employing modular SaaS and developing any unique functionality around it, you’ll reach your strategic goals sooner and at a lower cost than you ever believed possible,” says McLaren.