When planning for a new application, all organizations are faced with deciding whether to develop the application in-house or purchasing an off-the-shelf software package. Developing the application in-house has the benefit of ensuring the application is custom-fit to the organization's needs. Unfortunately, this custom-fit may result in an application that is not flexible enough to handle the changing needs of the organization. Additionally, in-house developed software includes ongoing costs as the application must be maintained to address bug issues and changing organizational requirements (McKay & Bath, 2008).
Because off-the-shelf software is developed for a general audience, it has the usual benefit of being more flexible than in-house developed software. Additionally, since the software is maintained by a third-party, it usually includes updates at no cost. This brings down the total cost of ownership compared to in-house developed software that must be maintained throughout its life cycle. Unfortunately, the generic nature of off-the-shelf software means that it may not be adaptable to an organization's specific needs. This means the organization may need to develop new practices, or purchase additional software that covers specific problem areas (McKay & Bath, 2008).
The role of information technology in an organization is to provide a competitive advantage whenever possible. An organization has a competitive advantage when it can outperform its competitors in an area of significant importance. The possibility of a competitive advantage is an influencing factor in the decision to build or buy a new software application. If an in-house developed application will allow an organization to become more competitive, it must seriously consider the endeavor (Senn, 2004). For example, a landscaping company gains no advantage from a custom designed accounting application. The company competes with other landscaping companies on the basis of price or service quality. Therefore, it would make sense for it would make sense for the landscaping company to acquire off-the-shelf software and adapt its business practices to fit within its scope.
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McKay, J. & Bath, G. (2008). The software test engineer's handbook: A study guide for the ISTQB test analyst and technical test analyst advanced level certificates. Santa Barbara, CA: Rocky Nook.
Senn, J. A. (2004). Information technology: Principles, practices, opportunities (3rd ed.). Upper Saddle River, NJ: Pearson.