Is building your own inventory management solution really your best bet?

The issues that businesses face when they decide to generate a solution in house are numerous: Scarce development resources, project cost overruns, delivery delays, unexpected technical issues, long-term maintenance issues. For these reasons, you should consider purchasing hosted, flexible, "out-of-the-box" vendor managed inventory (VMI) and web-based inventory solutions that may be running in five days, all at a fixed monthly price - with no delays, low risk and a lower total cost of ownership.

At Invendia weve often seen companies struggle with the decision to buy a technology or to generate that solution in-house. The decision criteria typically are:

Availability of qualified development resources
Long-term maintenance staffing
Implementation measure and costs
Project risk
Process data
3rd party objectivity

So, what are the top six reasons to buy rather than build an inventory management solution?

6. Availability of qualified development resources. If you have available resources that are experienced in developing web-based, distributed solutions then you should ponder building your own solution in house. In addition, your staff should ideally be knowledgeable about leveraging development standards such as J2EE or .NET. If not, you should source an off-the-shelf solution that might readily integrate with your existing applications.

5. Long term maintenance staffing. Once you have a solution, how are you going to keep it current, from both a technology and from a process point-of-view? For example, in the last few decades RFID, collaboration, wireless and countless other developments have forced companies to update their processes. With ever increasing innovations, you positive need to ensure that you are staffed to manage not only the system upgrades but any errors that you may discover. If you either dont have the staffing for this or dont want the headache, then you should ponder a "bought and maintained" solution.

4. Implementation time and cost. How quickly do you positive need a solution? If you have ample time to scope your project, make a project plan, costless-up resources, develop and test the application, then you should think about building the solution.

Furthermore, do you have the budget to pull off an in-house project? What are the opportunity costs? What is your companys track record of acquiring IT projects completed on-time and on-budget?

3. Project risk. One major reason that organizations generate in-house is that they want to make expertise in an emerging technology. Does this meet your organizations business goals? What if you find that the learning curve is long and steeper than you anticipated? Are you willing to take that risk? When you are scoping your project, have you considered all of the issues? Are you willing to stick to your original scope
when your users demand new features (scope creep)?

If you cannot mitigate these issues, then you should strongly consider a fixed price, packaged solution.

2. Process acquired skill . Collaborative inventory management(VMI) processes are
complex and varied as your trading partner needs. If you have many diverse trading partners (or can have in the future), building your own solution can not be a efficient idea (see "long term maintenance" above). Additionally, your trading partners might want to extend the utilize of the collaboration solution to their trading partners. Can they do this? Only if you are willing to get into the solution environment. This is especially important as your trading partners start to get more and more benefit from these solutions and may force you to switch to another solution.

1. Third-party objectivity. A critical concern for trading partners is that of data confidentiality and security. Most trading partners are leery of exchanging critical and confidential and feel more relaxed with a third party managing the data. Is this a critical issue for your organization?

Summary
In the nascent days of any technology, be it the car or software, many businesses think that they can make the better mousetrap. However, as the technology evolves and becomes more complete, there are significant barriers to entry. As the collaborative inventory management field continues to evolve, there are enough reasons to give pause before deciding to generate a solution in-house.