Should You Build Or Buy Management Reporting Software?

Should You Build Or Buy Management Reporting Software?
Looking for a management reporting solution: should you build software or buy it.

Are you frustrated with your current management reporting process? Spending too much time gathering the data you need, trying to communicate what the data means to everyone who needs to know, and battling with data and visualizations in Excel, Word, and other tools to try to put together polished reports?

If so, you’re not alone! It’s a story we hear every day. In fact, ClearPoint was created by managers, for managers to solve this exact headache. We make management reporting simple and efficient, so you can focus on making better decisions.

We’re big advocates of using ClearPoint to help transform your management reporting process, but we understand that there are other options out there. We also understand the mindset of “if you want something done right, do it yourself.”

There are plenty of instances where “doing it yourself” is applicable… but also plenty of instances where it’s not.  We’ve written this article so you have the information that you need to make a good decision when choosing whether to buy software or build it yourself.

7 Things To Consider Before You Build Or Buy Management Reporting Software

  • 1. Getting started
  • 2. Support
  • 3. Feature updates
  • 4. Time savings
  • 5. ROI
  • 6. Risk
  • 7. Exit strategy

1. Getting Started

So, how important is managing your strategy today?  How much longer can you stick with the status quo?  If you are like many of our clients, your current process must be far from perfect and quite a time sink.  Let us walk you through the options.

Buy: “Let’s get started immediately.”

With ClearPoint (or other applications), you can typically have them turned on and ready to use in minutes.  Then, you can put your information into the application in days, get a little training, and produce your first report in a matter of weeks.  Give a little time for adoption, and you will be up and running within the quarter.  Goodbye Excel Hell and hello happy reporting!

Build: “Allocate the internal resources.”

If you don’t have a good cost accounting system, then building seems like it is “free” because you are not writing any checks to a software company.  If you do allocate costs, have you received an estimate from IT for the internal costs to build a standalone application? How long will it take to build what you want?

Let’s assume your IT department is building your application.  Do they understand the problem you are trying to solve?  Are you looking for better charting, data integration, exported reports, user management, or alignment?  First, you need to clearly define your challenges.  Then, you need to build functional specifications and technical specifications before you can get started.  It took us 8 months to launch our first application, and we have been doing major enhancements twice a year for the last 10 years with a dedicated team of developers.

Can your strategy wait 8-18 months to get an MVP (minimum viable product) on the table?  Will you have user management or the ability to print?  What about the ability to change the look of a report on the fly?

Remember that $800/month for ClearPoint is the equivalent of $5/hour, ALL IN.  I would imagine your development team is more expensive than that.  If you are still considering building, keep reading.

2. Support

I’ve said this before, and I’ll say it again: time really is money, especially when it comes to strategic business decisions. So, if you select a software vendor that doesn’t offer proper support, you’re going to deal with a lot of back-and-forth conversations or frustration from the silence that follows when you ask questions. If you build a software system internally, you need to make sure that you have an SLA (service level agreement) in place so that you can receive support when you need it.  How quickly will they respond when your executive team wants to see a new report layout?  The ClearPoint Support Team’s average response time for all questions is 3.5 minutes.

Buy: “Is there a full-time team managing the software you are going to purchase?”

Once you’ve decided on a solution and implemented it, do you know how you’re going to get help? To avoid confusion, figure this out before you purchase software. Look at the support structure and help-desk options offered by your top three software vendors. They’ll be able to answer your questions, like what type of support is included with your package and what services they offer if you want additional support.

Make sure you consider how you and your team prefer asking for help. This may include e-mail, in-app chat, telephone, or the ability to schedule calls with someone who can share their screen and walk you through a solution to your question. Also, keep in mind the support team’s hours to ensure that someone is always available when you need help.

Build: “Can we manage this whole process by ourselves?”

You can’t plan on building a software solution without fully understanding how you’ll get the support that you need. You’ll need to have a comprehensive plan in place for training, enhancement, fixing bugs, daily support and more. You’ll also need to decide whether you have a team dedicated solely to the software, or whether current team members will be handling software support.

If your team members are wasting valuable time trying to work a software kink out of a system you just created, or they’re spending hours of time in meetings trying to figure out which new critical features need to be released (and when they can release them), they’re going to be pulled away from other important tasks and projects. It’s easy to see how this would have a direct effect on your productivity and your bottom line.

3. Feature updates

I’m trying to think back and imagine the first version of ClearPoint that we built, and what has changed since then.  Yes, we’ve been doing this for more than 10 years. Here are just a few of the hundreds of features that were not in our first version, that we consider critical to any reporting application:

  • An audit log and an undo button
  • User permissions and granular controls
  • Data integrations with multiple applications and spreadsheets
  • The ability to manage both projects and KPIs (ok, this one was in our first version, and it should be in yours as well)
  • Automatic calculations and evaluations, of all types, including aggregations and status counts
  • Scheduling and notifications (read more about time savings below)

Buy: “Is the software company regularly adding new and updating existing features?”

If you’ve been using the same software for three years and they haven’t put out a single update, that could be a sign that the software is in trouble. You’ll want to go with a company that has a strong track record for adding new features. Check to see when their last update was, what it included, and when the next update is. They should also be able to tell you what’s on their roadmap for the future and whether any features you think are currently lacking are planned for implementation.

You may not know the changes that future software updates will bring, but if you purchase from a great software vendor, you’ll have the peace of mind that you’ll be getting a better ROI in the long term. Make sure that the team members supporting the software are experts in management reporting in addition to technology. You want to work with a company that prioritizes implementing best practices and incorporates customer feedback and feature requests.

Build: “Will you have the time and budget necessary to build out and implement new features yourself?”

To accurately answer this question, you’ll need to first understand whether your organization will have a team set aside to continually enhance the product you’ve created. Beyond that, how quickly will they be able to make the changes necessary? Is there a budget for these types of changes?

If you build out your own solution, you can’t just think about creating a solution that fixes the issues you’re having right now. You must be ready to fix bugs and implement new ideas and features that your company will want and need in the future. This will take a great deal of time, effort, and dedication—and if you don’t follow up here, you run the risk of frustrating upper management and creating a piece of software that’s only good for the short-term.

Before you decide whether to build or buy, you should try to figure out which features you’d eventually like to have, and which features aren’t as important. If you’re interested in purchasing the software, ask the companies you’re looking at where they’re headed in the future with feature implementation. If you’d rather build, determine who will be hired on to implement new features on a regular basis.

Also, if you don’t think the “look and feel” aka “the user interface” of the application is important, watch a movie that is 10 years old and think if you would want to use that to manage your strategy.  We’ve conducted major overhauls every 4-5 years to stay relevant with the way people use software.  It will keep users engaged and excited about executing your strategy.

4. Time savings

Some people fall into the trap of thinking that they just need an application to make prettier graphs or reports.  While that is the eye candy that makes the end product of reporting look good, you can’t forget about the effort that goes into making a report.  You need to find the data from multiple sources and consolidate or load it into one place.  Then get project data and qualitative analysis and format it consistently. This process of reporting could take up to 40 hours per report, and depending on the number of people involved, it could quickly spiral to 100 or more hours across your organization.

Buy: “Will the solution I select make my reporting process easier and more efficient?

When you’re looking for a piece of software to buy, make sure it’s easy to use. You want your team to be able to save time creating their reports, and you don’t want them to get frustrated trying to find their way around a new piece of software. The tool you choose should integrate with other applications that you use so that you don’t have to manually upload your data and it’s always in your reporting tool when you need it.

Automating data uploads is important, but there are many other aspects of your process that you can consider automating. Make sure the tool you select can automatically send email reminders to your users to make their updates, and automatically send out reports before your meetings. This will save you the hassle of manually reminding your team to make updates and you won’t need to login to create reports manually.

Build: “Will I spend more time helping to create the software than I save using the software?”

Remember, building software takes a ton of work from many members of your team, including you. You’ll need to make sure you define all of the features that you want the tool to have, you’ll have to answer questions that the developers come back to you with, and you’ll need to make requests in the future when things don’t end up working the way that you wanted them to.

Once you consider all the time you’ll need to spend in the development and planning of the application, you may find that you’re not saving any time at all. And if the new software tool doesn’t make your actual process more efficient, you’ve wasted a lot of time for nothing.

5. ROI

Arguably the most important of these seven “things” to consider before making your decision is ROI. You need to take a cold, hard look at the bottom line of your two options, so you can fully understand the total cost of software ownership. This may seem like the most obvious component for making sure that you get a good return on your investment, but some aspects are often overlooked.

Buy: “Are we saving money and time by implementing a third-party software solution?”

The great thing about purchasing a license for software is you only have to think about the initial and ongoing fees, while the software company has to manage the development, testing, new features, security, and uptime. To ensure you are selecting the best solution from an ROI standpoint, follow these steps.

First, you need to look at the cost/benefit breakdown of any solutions you are considering. This will help you understand which options are going to give you the most bang for your buck.

Then, you need to weigh those costs and benefits against what fits in your budget. This step is skipped by organizations all the time but is critical to the reporting software selection process. Just because you’ve identified the reporting tool that seems to offer the most options for the best price doesn’t mean you can afford that option. Your second or third choice may be more attainable.

Here’s what you’ll want to measure even before implementing new software:

  1. Upfront costs: How much does the implementation cost?
  2. Recurring costs: How much does it cost per month, per user?
  3. Scalability: How many users do we plan to add within the next year, and how will that impact cost?
  4. Labor cost: How much time do we dedicate to reporting before implementation? How much time do we dedicate to reporting after implementation? What is the difference/savings in labor cost per month?

By tracking these four metrics, you’ll be able to ensure that the time and money you’re putting into a management reporting software solution will be worth it.

Build: “Are we accurately accounting for all of the costs around building, supporting, and maintaining a new software?”

If you’re going to build out your own software solution, you have to take a lot of expenses into account. This is probably the biggest downside to creating your own solution instead of purchasing a pre-made software. You’ll need to consider:

  • Your development team’s time, which should account for time spent in the planning stages, during the software creation, and after it’s created.
  • Your management team’s time, which includes comprehensive feature development, testing, and use.
  • Your leadership team’s time, which includes scoping projects, reviewing potential new software updates, and more.
  • Regular upkeep and management.
  • Miscellaneous costs:
  • Server bills
  • Redundancy
  • Security
  • Uptime
  • Backuo

Remember, time is money! Do you have an abundance of both to spend on a software creation project?  The ClearPoint professional plan is about $5/hour, and even if you went to a plan 10x that cost, an argument could be made that it would still be way cheaper to buy software than to manage an internal creation.

6. Risk

Let’s say you are still in the throws of deciding whether to build or buy.  My guess is that at this point, you are arguing with your finance team to buy, and your IT department is trying to argue that they have the skills to build (if only they had a little more budget).  So, how do you manage against the uncertainty of either future state?

Buy: “Is this company going to deliver on their promises?”

How do you know the software vendor you are using will pan out for you?  At ClearPoint, one of our core values is to “Care about the Customer,” which we translate into “turning our customers into heroes”.  Read our case studies, check out our reviews on Capterra and G2 Crowd, and when you are ready to buy, talk to some customers who just implemented ClearPoint.

Also, why not start a free trial so that you can see what ClearPoint is really like?  The great thing about using a software company is that the software already exists, and you can mock-up your organization’s information in it to see if it will work for what you’re trying to achieve.  We have higher than an 85% renewal rate, and more than 70% of our customers are in multi-year agreements because of their commitment to managing like a professional.

Build: “What is the track record of my organization in building internal applications?”

Does my IT department have a great reputation for understanding management reporting? Have we built internal applications in the past?  What is the typical timeframe and how have we adjusted?

This section is about risk, so what happens when something goes wrong?  Do we use internal service level agreements?  Find an example of an application that your IT team built 5 years ago and see how it’s used today.

Further, many IT organizations have a strong focus on one application, maybe Salesforce or Oracle or SharePoint or Power BI, that they are recommending.  Are these tools really best for strategy management?  If so, why don’t they have a great application that already does this?  Why are we doing a lot of custom configurations?

7. Exit strategy

Have you ever switched software applications for anything?  Maybe moved from MySpace to Facebook or AOL to Google?  What about Salesforce to HubSpot or Microsoft Office to Office 365 (or even Google docs).  With so many options available, this takes place frequently.  What’s your approach if you need to change your strategy management solution?

Buy: “What is our exit strategy if the software doesn’t work out?”

Ideally, you want to select a software tool that you’re going to use for the long term. But things happen, and it’s always better to be prepared with an exit strategy just in case things don’t work out. There’s a lot to take into consideration here, but you need to have a basic plan, ask around (for what other organizations have done in these instances), and get it in writing.

Also, ask your vendor (if ClearPoint, ask us, your partner).  How do you get information out of the application if you decide to go in a different direction?  At ClearPoint, we can export all reports to PDF.  We have an open API for you to build custom exports and integrations, and we can build a database export with an attached data dictionary.

Build: “What if we can’t keep up with the cost and time demands to make the software fully functional?”

If you’re creating the management reporting software yourself, this is a tricky question to answer. At the end of the day, the money and time that you’ve sunk into a piece of failed software is far more than what you would have invested in a software license. So, this topic, while unpleasant, needs to be dealt with before you move forward with building out your own solution.

Make sure you have a candid discussion before you get started.  What will we do if we cannot get a fully developed application?  Who gets to make this decision and when (6 months, 12 months)?  How long is too long to respond to the end users when they have questions?  Do we have an SLA, and what happens if we break this agreement?  What is the check-in process for discussing what is working and what is not?

In Summary

Deciding whether you want to buy or build your management reporting software is a big decision. You want to ensure that you end up with a reporting solution that offers a great ROI, improves your decision-making process, and is easy to use.

If you’re set on building software, you’ll need to take a long, hard look at the total budget, and then decide whether this project lines up with your strategic objectives.

When buying software, ask current and former customers for their honest opinions as to whether the software has been important and helpful, or if the company is just out there to make a quick buck.

Obviously, we’d suggest buying software, and making the decision to partner with our team at ClearPoint. We can guarantee that you’ll have a great ROI and will save time and money with your process when you leverage ClearPoint. And our customers agree. Just ask them yourself! We’ll even set you up to talk with them if you want.

When you’re ready to learn more about ClearPoint and see your plan within the tool, let us know. We’ll put in your info, give you a tour, and let you try it out yourself before you make a final decision. We’re confident you’ll love it!

Should You Build Or Buy Management Reporting Software?

Ted Jackson

Co-Founder & Alabama Native

Ted is a Founder and Managing Partner of ClearPoint Strategy and leads the sales and marketing teams.