Buying software vs investing in your own software assets

Buying software for your business and paying for a zoo of on-line services is an overhead expense. You’re spending money, time and energy. Your goal is to to minimise that. On the other hand, when you are investing in building your bespoke, unified business software platform – you are creating an asset. It’s a competitive advantage, which helps you focus on your growth while yielding increasing ROI day after day. Your goal is to do more of this.

Now more than ever it is practically impossible to do any kind of business without relying on multiple pieces of software and on-line services. At a minimum, your business is probably using software for invoicing, business accounting, payroll, a CRM system for managing client data, another system for supply chain management, a place to store and organise various documents and archives, a place to manage social media and your digital assets (like your website), perhaps you also use e-Commerce services, communication software, customer support ticketing, tools for managing inventory, scheduling, appointments, time-sheets, and so on.

Perhaps a lot of this goes in Excel spreadsheets or something else your staff has hacked together. Some of this software is probably free, some you’ve paid for, some is a recurring monthly expense (whether for licensing or for access to on-line services). Perhaps you’re even paying for professional, integrated solutions from the likes of SAP, Oracle or Microsoft. The point is – all of this software is overhead. It’s an additional expense, which your directors have a duty to continuously try to minimise, because less expenses means more profit. While some of these expenses might be relatively trivial, professional business software can be incredibly expensive.

Unless you know what you’re doing.

The key shift in perspective, which literally sets apart all modern successful businesses, is the realisation that investing in their own, tailored enterprise software platform specifically designed from the ground up to support their unique set of activities and their corporate culture leads to the creation of their most valuable digital asset. It is the only investment that can simultaneously:

  • Cut costs and optimise performance;
  • Enhance the capabilities of the business and its capacity to deliver;
  • Become the secret sauce of your business, leading to unbeatable competitive advantage in an uncontested market space;
  • Increase in value exponentially as a function of the business growth rate.

Your bespoke business software platform is your most valuable intellectual property. If designed well and nurtured as the company grows, it will inevitably expand to contain the most complete and detailed blueprint of all operations and business processes – the set of activities that make your business unique and different from the competition.

Imagine someone is interested in acquiring your business. All the money you’ve spent and continue to spend on loose pieces of software goes on the expense side in their calculations. It’s unattractive.

The money, time and expertise you have invested in your own software platform, on the other hand, now looks like pure gold at the very core of your business, dramatically increasing your valuation.