The pros and cons of building or running your label printing business on custom / homegrown software
One of the areas where Label Traxx has thrived over the last 30 years is working with label converters who have no Print MIS/ERP in place or they have a homegrown system that they have outgrown. Often homegrown systems were developed by — and are supported by — a single individual. When that individual leaves the company, retires or simply is no longer available, they can be difficult to replace. Your Print MIS/ERP is the system of record for your business, resting that system on a single point of failure is a large risk. Commercial software is not risk free but a commercially available solution is used by many label converters and supported by a business entity.
Homegrown software
Software is definitely easier to build today than it was even a decade ago. The tools have been democratized, the costs of the toolsets due to open source options have dropped significantly. If you have access to software development resources, it can be tempting to throw commercial software out and build the software that perfectly fits your business. This is even a more tempting idea when your business is very small and you want to save investment dollars to build your label printing capacity.
Building your own business software is a long-term commitment. Software isn’t a static thing. It needs to be continuously updated, not only because your business keeps changing but the technology environment that software has to operate in is in constant flux. This includes the operating systems of the computers in use, the browsers you use to access the cloud/internet, security considerations, regulatory changes, etc.
There are a few common mistakes when businesses decide to “build it themselves” when it comes to software solutions.
- Relying on a single software developer – The fastest and least expensive software to build is done by a single individual. That makes this a compelling idea, especially if you have access to a good developer. But that approach is very risky. Most home grown systems are overly reliant on a single person’s context over the solution. You have a single point of failure for what could be a strategic part of your business (especially if it's your Print MIS). And what happens when that person moves on?
- Short-term focused – It is difficult for someone in the business to have a long-term focus, and to stay as current with evolving industry and customer needs, or to have the necessary long-term vision.
- Believing that your business is special – Well, of course it is special! But there are a set of common characteristics among label businesses that lend themselves to more similarity than you might think. Do you really want to pay someone to code the ability to create a purchase order? Is that a differentiation in your business or an expectation?
- Unwillingness to alter your business processes to fit commercial software – This is something we see quite often. Processes are much cheaper to change than software. Yet, time and time again we see printers unwilling to alter their processes to optimize their use of the commercial software - change management is a key component of every successful Print MIS/ERP implementation.
- An inaccurate approach to allocation of the true costs of the homegrown solution – you control how you allocate cost, you can always make it look like the right decision. But in reality, there are likely more costs than you are accounting for, both hard and soft costs. Are you a printer or a software developer?
Commercial software is not perfect. Homegrown software is not perfect. There is no such thing as perfect software, in fact. Software is made by humans and those humans make imperfect decisions. Commercial software companies also make decisions based on what will benefit the largest target market for their product, and this direction might not perfectly align with your print business's direction or needs.
That being said, commercial software is a lot less risky because the software is widely used and therefore has revenues fueling its continued evolution. Commercial software can look more costly than homegrown software, and that can be due to the fact that you don’t control the accounting allocation for commercial software. It's either capitalized or paid for out of your operating budget. The costs have nowhere to hide.
In addition, manufacturers of commercial software work hard to keep ahead of the trends, both through their communications with their customers and by paying attention to what is happening in the industry. In many cases, they will identify changing needs well before you could; and this prevents a lot of headaches.
Another factor we have noticed is that if you are either acquiring someone or looking to sell or gain investors for your business, the risks of your homegrown software surface immediately. That is especially true if the company you are acquiring also has its own homegrown system. It’s enough work to integrate a new company into an existing one. But if both have homegrown systems, it becomes extremely challenging. If your company has a solid commercial Print MIS/ERP system in place — especially one tuned to the label industry — not only do you have a good foundation to transition a new company into the mix, but you have a built-in support infrastructure to help you. And that is typically much less costly than throwing people at the problem.
These are just some of the pros and cons of homegrown and commercial software. At Label Traxx, we have a wealth of experience in transitioning label converters from their homegrown solutions, as well as identifying how to help your employees transition to a new system.
And, of course, we are always happy to talk with you about your specific situation. Perhaps homegrown is better for you; perhaps not. Feel free to contact us: sales@labeltraxx.com.
