In this year’s recent Federal Budget, the Government announced it would support small businesses’ digital and technology investments through tax deductions. It’s good news for SMEs, but how do you choose which digital tools to leverage?
For ICT teams and founders in SMEs starting on their business journey, one of the first questions asked is how to effectively direct spend across the tech stack. And this often starts with either purchasing ready-built commercial software versus building your own tech stack from scratch.
For resource-constrained SMEs, the option to rip and replace is not always feasible, so getting the first move right can be crucial. Here are two important discussion points that you should factor into the decision:
Assessing your buy vs. build options
Working with a third-party provider has some key advantages. Firstly, they provide a holistic tech stack ready-built to address the needs of most small businesses. This includes the management and updating of infrastructure, which means smaller teams can focus on more important digital innovation and customer advancements.
Depending on the complexity of a business this might be the best choice. A third-party vendor will also have experience dealing and managing the exact issues a business is facing, so having a partner in this journey can be incredibly supportive.
On the other hand, if ICT teams can foresee their business requiring unique and ongoing initiatives when it comes to tech development, a purpose-built tech stack that addresses needs may be worth the initial overhead. Buying “off the rack” doesn’t always offer greater simplicity, so having personalised software, which is manageable on the internal side, may end up being cheaper in the long run.
Finding the best solution for an SME often comes down to the unique needs of a business; it’s a sliding scale between simplicity and reliability.
Consider the costs of technology properly
Before jumping in, it’s important to estimate the differences in cost between the two options.
Understanding initial development costs, management costs over time and quality assurance for the front-end should all be taken into consideration. Anticipating whether the tech team has the capacity and ability is also crucial.
For a small business just starting out, hiring extensive tech talent may not be a priority or even feasible. The main focus should be on developing and refining the product offering, not developing a software solution. If building a tech stack could be considered a business within itself, then it’s likely best to buy unless you have the staffing and skill resources to manage any challenges that might arise.
If your business is in a more mature stage and requires many solutions within the tech stack, owning the intellectual property to software and implementing holistic solutions in one go could be a better option.
Ultimately, tech leaders will need to decide between cost-efficiency and scalability that balance the company’s immediate needs with its long-term growth.
Given how unique this decision is, it’s always worth comparing and weighing up options to figure out what is best. Now you have all the tools to do so, you have the ability to make an informed decision when it comes to your own business and create a tech stack that works for you.