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Is it more cost-effective to build vs buy a supply chain resiliency program? Learn the true costs of building before you commit.
We’ve all had this feeling before: you see a piece of furniture or a painting and think, “I could make that myself! And for half the cost!” Sometimes, your gut feeling is right, and it ends up being cheaper. Other times, you may find yourself surrounded by new tools and expensive equipment feeling stressed out. While building things yourself sounds cheaper, it can often be more costly—in both the amount of time spent in development, earning the skills required to do the job, and the actual investment in materials, tools, etc.
The same can be true of building your own supply chain resiliency program. It may seem like the cheaper choice, however, there are hidden costs associated with building your own platform. In this blog, we’ll look at costs you should consider when deciding to build vs buy a supply chain resiliency program, so you don’t spend more time (or money) than you expect.
Initial Development Costs
The Initial Costs of Building Your Own Supply Chain Resiliency Program
Building an in-house supply chain resiliency solution requires significant upfront investment—up to millions of dollars in initial development costs. Technology infrastructure costs such as licensing, security, and hosting are a major lift. Housing the massive amount of data required for mapping your supply chain and performing meaningful analysis requires upkeep and needs to be securely protected from cyber threats. You will also have to spend time reallocating resources to the new program such as ongoing maintenance, user support, implementing the latest technologies, and training for employees.
The Initial Costs of Buying a SCRM Solution
When you buy a solution, the pricing should be transparent and all-inclusive—that way you know the costs right off the bat and can scale services up or down based on business needs. Compared to building a solution, you will get a faster return on your investment because of the lower cost and faster time to launch the program. If you’re curious about how much money you could save by working with an existing SCRM solution like Resilinc, check out Resilinc’s Supply Chain Resiliency ROI calculator.
The platform you work with should continue to invest in product enhancements and leading technology. For example, at Resilinc, we are always innovating to improve our product, and our customers receive the benefits of our R&D investments with no additional costs. Conversely, when building your own platform, keeping up with the latest technologies can feel like a moving target. Initial investment costs, implementing product enhancements, maintenance, and employee/team training can quickly add up. Your company will need to allocate valuable time and resources to innovating—an objective that often falls to the wayside due to the amount of time it takes to get an in-house program up and running.
Read our eBook to learn more about the costs of building a supply chain resiliency program: To Build or Buy: 9 Considerations for a Supply Chain Resiliency Solution.
Opportunity Costs
Opportunity Costs of Building an In-House Supply Chain Resiliency Program
With any DIY project, it takes time and resources to get started. Similarly, investing in an in-house solution often means diverting valuable resources and talent away from core business activities. When we interviewed a Supply Chain Chief of Staff, he shared this reason for choosing to work with Resilinc instead of building an in-house program: “Prior to partnering with Resilinc, our team explored the idea of mapping our sub-tier supplier network in-house. We quickly realized the effort required to do this effectively would take staff away from their day jobs. In short, the opportunity cost of taking team members away from their primary job was not worth it.”
If you build your own solution, reallocating employees can put a strain on operations. Doing so diverts internal talents away from core business activities and shifts your company’s focus away from business growth to software development (which may not even be in your wheelhouse). While you spend time setting up the platform, it will reduce your company’s capacity to innovate core products and can result in delayed ROI with potential loss of market share. Plainly stated, depending on how much time you invest in the project, it might start to negatively impact other core responsibilities.
Benefits of Buying a Supply Chain Resiliency Program
Off-the-shelf solutions provide predictable costs and faster implementation, enabling your team to concentrate on growth. This keeps your team agile and frees them up to capitalize on market opportunities while maintaining scalability.
As supply chain risks like extreme weather, ESG legislation, labor disruptions, and cyber attacks continue to increase, supply chain resiliency has become a necessity for businesses—making the decision of whether to build or buy increasingly urgent. While building an in-house supply chain resiliency solution may offer control and customization, it often delays ROI and diverts resources from core business activities. In contrast, buying a proven platform ensures quicker deployment, access to industry-leading innovations, and the ability to focus on what matters most—driving your business forward.
Want to learn more about building vs buying a supply chain resiliency solution? Discover other supply chain solution considerations you should look at outside of cost before you build vs buy a supply chain resiliency program.
