At the start of a digitalization project, many questions often arise: How much time and budget are available? Can customization be handled by internal staff? Are there requirements in risk management or security? The answers to many of these questions often determine whether a solution should be purchased or developed in-house.
In-house development: tailored to your needs
The advantage of in-house development is obvious: the company’s specific requirements can be addressed directly and implemented in a precise and customized way. Thanks to close communication, the resulting solution remains agile and flexible even after the project has started. However, this approach to digitalization also has its drawbacks. While higher development costs are usually justified by the level of customization and the ability to differentiate from competitors, documentation efforts often far exceed initial estimates. This is because edge cases—ideally identified during quality assurance but often only discovered after going live—must be analyzed and documented by qualified personnel to ensure they do not pose a risk to the digitalized process.
With in-house development, individual requirements can be directly addressed and precisely fulfilled.
Efforts involved in requirements analysis are also often underestimated: while stakeholders know the process in detail, software developers must first build their own understanding of its nuances. It is therefore essential to involve them early on. Otherwise, there is a risk of implicit assumptions that, in the worst case, can negatively impact operations after go-live. At the very least, such communication issues can lead to lower acceptance of the solution among business users.
At the start of a digitalization project, many questions often arise: How much time and budget are available? Can customization be handled by internal staff? Are there requirements in risk management or security? The answers to many of these questions often determine whether a solution should be purchased or developed in-house.
Standard solution: ready to use quickly
A company can avoid the disadvantages mentioned above by purchasing a standard solution. This is particularly easy when the underlying processes already align closely with industry standards. While buying standard software comes at the cost of individuality, the time and effort required are only a fraction of those needed for in-house development. The resources gained can then be used in areas where custom solutions make sense.
A purchased solution is often immediately, or at least quickly, ready for use. This is beneficial in digitalization projects, as the shorter time between project start and go-live means management support only needs to be maintained for a shorter period. Management benefits from the immediacy between decision and implementation. Therefore, purchasing a solution does not necessarily mean losing flexibility.
Another clear advantage is that maintenance contracts make ongoing costs more transparent and predictable. In contrast, maintenance costs in in-house development are often difficult to estimate over the long term. Standard solutions are already proven in real-world use, and by purchasing them, companies also invest in product maturity and can leverage industry experience in their decision-making process.
Despite all these advantages, standard software also presents a significant risk. In digitalization projects, it is often necessary to gain acceptance within business departments. If this acceptance cannot be achieved with a standard solution, it can lead to a significant increase in project costs—especially if this realization does not occur during the planning phase. In such cases, the purchased solution must be customized to meet specific business requirements. This is often only possible to a limited extent and can result in complex, hard-to-maintain code fragments. The obvious solution—adapting business processes alongside the implementation of the software—is one of the most challenging tasks in any digitalization project.
The best of both worlds
This challenge can be addressed with a hybrid approach, where part of the process is handled using standard software, while another part remains under the company’s control. The solution lies in outsourcing standard functions to the cloud. For example, data transformation into industry standards such as EDI, DV90, or BiPRO (examples from the insurance sector) can be handled by cloud services, while the required data sets are generated internally by proprietary software.
With X4 BPMS, the advantages of both approaches are combined and further enhanced.
In addition to combining the benefits of full in-house development and standard solutions, the hybrid approach also allows cloud-based process components to be easily scaled in line with business growth. Costs scale accordingly: many cloud solutions offer transaction-based pricing models, where costs are calculated based on usage rather than fixed rates. This is particularly attractive in the early stages of digitalization.
X4 BPMS goes one step further: in addition to offering industry-specific cloud solutions, the underlying infrastructure is also available for on-premise use. The low-code approach, combined with over 200 built-in adapters, makes it easy to connect cloud services with existing in-house developments as well as standard software from other processes.
