In 2020, the retail industry is going through a major digital transformation. While ecommerce is growing at a 30% rate, offline retail is not likely to get back to the pre-pandemic levels in the next five years. New challenges are popping up, changing customers’ behavior patterns and industry trends. To stay afloat, businesses must react promptly and accordingly. In pursuit of a smooth and seamless digital experience, companies are adopting new technologies, and that’s where they face the question of whether to develop a proprietary solution or integrate a ready-made one.
Here is a comparison of in-house development and third-party integrations based on the timeframe, development, security, costs, and further maintenance of the infrastructure. In online retail, visual representation of products plays a big part in revenue generation (and hence the decision-making process), so let’s compare the two approaches using the example of a file-handling solution.
Outsourcing Saves Time
It’s easy to underestimate the resource costs needed to build out a media pipeline. A file-handling infrastructure usually includes a content delivery network (CDN) to efficiently store and serve media files, using image optimization and transformation technologies for adaptive content delivery. An infrastructure like that can take anywhere from 3 to 6 months to develop, depending on the qualification of the team and the workload. Every day spent in development is another day out of the market.
Plus, there’s a high chance of schedule overruns, which could force you to push back your release date. If you’re launching an MVP, you may end up spending more time working on the media pipeline than the product itself, stealing attention from the killer feature and main functionality of the product. Integrating and customizing a ready-made solution, on the other hand, won’t take more than one working day, so you don’t have to disturb the workflow or postpone a product or feature launch.
You can look at using a ready-made solution the same way you would look at outsourcing a project. It solves the issue from beginning to end, while your company remains in full control of the situation: you can customize the software, and terminate the contract whenever you like. At the same time, all the operational tasks are performed by the outside team.
Integrations Reduce Total Cost of Ownership
By integrating a ready-made solution, a company can save up to $200,000 on development costs. In addition to that, on average, 66% of projects overrun their budget, meaning that the number can be much bigger. You should weigh the cost of an integrated solution against the cost of hiring a dedicated engineer (or team of engineers) to build a solution from scratch and then monitor and maintain it to make sure it works without a flaw.
The cost of integration includes everything: an image CDN, image manipulation tools, a UI for digital content management, and a support system. With the wide number of options available, your business can find a service in your price range. Even if you decide to go with a comprehensive yearly subscription, it still will be less than the development costs, and it may even include a DevOps specialist assigned to your company.
Buying Technology Saves Team Resources
Whether it’s an integrated solution or proprietary software, the requirements are the same. The technology must be stable, reliable, and competitive on the market.
If your company has a strong team of engineers, it may be tempting to start coding the solution from scratch. But the issue is that the codebase of an ecommerce platform is entirely different from a file handling infrastructure. It’s hard to become an expert overnight and write image optimization algorithms that will be able to compete with the fastest ones available on the market. With that in mind, developing an in-house solution may sound like an attempt to reinvent the wheel. Besides, the work will require either and extra load on your current team, or hiring 3-4 additional engineers, and will take around 17.5 staff months.
To be fair, third-party solutions still take some time to integrate and configure. Not all platforms have documentation written in simple English. But often, if a client company doesn’t have an IT department, the service provider can connect the team with a Customer Success Engineer or allocate a dedicated DevOps person or other specialists to handle the issue.
Maintaining a DIY Solution Has Its Risks
The main benefit of the in-house option is that you have full control of it at all times, but it also means you are responsible for every line of code. There’s always a risk of creating a product which is difficult to maintain in the long run. Eventually, the codebase will grow and demand refactoring, updates, and checkups. If you build a platform on top of third-party integrations, your team won’t waste time maintaining code that doesn’t power any of the core features or infrastructure.
An upside of having a proprietary solution is that you never risk that one day it may cease to exist, which is always a possibility with a ready-made solution. But there are plenty of alternatives for any budget and purpose.
Same Level of Security
Security of customer information is a foreseeable argument and the main concern pointed out by many proponents of in-house solutions. Sure enough, proprietary infrastructure will comply with any robust security regulations of your choice. But service providers honor safety and follow industry-standard security compliances, including the GDPR and CCPA, and provide service-legal agreements and security precautions regarding who and when can access the data.
To create a fully proprietary platform which is autonomous from any service provider is an appealing goal. But what is the reasoning behind it? The value of any tool is measured by the positive effect it has on retail business metrics. Hence, developing an in-house infrastructure for the sole purpose of keeping the product free from third-party integrations is counterproductive for your business.
Integrated solutions have already proved their reliability and cost-efficiency, saving ecommerce businesses thousands of dollars and months in development. Resources saved on technology cost reduction can be redirected to marketing or further development of the product.