Build or Buy: Deciding on a Custom RFP Solution for Your Team

Introduction

When it comes to managing Requests for Proposals (RFPs), organizations face a critical decision: Should they build a custom RFP solution tailored to their unique needs, or buy an existing product with proven features? This decision is not just about technology but also about aligning with the company’s long-term business strategy and effectively allocating resources. This article provides a framework for evaluating the build vs. buy decision for RFP solutions, helping you make an informed choice that supports your business goals.

‍

Evaluating the Cost Implications

#1: Upfront Costs

Building: Developing a custom RFP solution involves significant upfront costs, including software development, testing, and deployment. These costs can range from tens of thousands to millions of dollars, depending on the complexity of the system. Additionally, the development timeline can extend over several months to a year, further inflating costs due to delays and unforeseen challenges​.

Buying: In contrast, buying an off-the-shelf RFP solution typically involves a one-time licensing fee or a subscription cost. According to various online sources, the average cost of commercial RFP tools ranges from $10,000 to $50,000 annually, depending on the number of users and features​. While this is a lower upfront investment, it’s important to factor in ongoing subscription costs.

‍

#2: Maintenance and Support

Building: Maintaining a custom-built solution requires ongoing investment in updates, bug fixes, and support. This often necessitates dedicated IT staff or contractors, which can be costly over time. Furthermore, any changes in business needs or technology advancements will require additional development efforts, adding to the total cost of ownership.

Buying: Off-the-shelf solutions typically include vendor-provided maintenance and support, which can significantly reduce internal resource demands. For example, companies using commercial RFP tools benefit from regular updates, security patches, and customer support without additional costs. This allows businesses to focus more on their core competencies rather than software maintenance​​.

‍

#3: Opportunity Costs

Building: Building a custom solution often diverts resources—time, money, and talent—from other strategic initiatives. This opportunity cost can be substantial, especially if the development process encounters delays or requires more resources than initially planned​.

Buying: Purchasing a commercial solution allows a company to quickly implement the RFP tool and focus on strategic activities that drive revenue, such as improving proposal quality and closing deals. This can lead to a faster return on investment compared to the lengthy development timeline of a custom-built solution​.

‍

Scalability and Flexibility

#1: Scalability of Custom Solutions

Building: Custom solutions can be designed with specific scalability needs in mind, but scaling a custom-built system can be complex and costly if not planned for from the outset. As the company grows, the system may require significant modifications to handle increased volume or complexity, leading to additional costs and potential disruptions.

Buying: Off-the-shelf products often come with built-in scalability options, supported by the vendor’s infrastructure. Some RFP platforms offer scalable solutions that can easily accommodate the growth of your organization without requiring major overhauls. This makes commercial products more adaptable to changing business needs.

‍

#2: Flexibility and Customization

Building: Custom solutions offer unparalleled flexibility, allowing the software to be tailored precisely to the business's workflows and requirements. This is ideal for organizations with unique processes that cannot be accommodated by standard commercial tools​.

Buying: While off-the-shelf products may offer customization options, they are often limited compared to a fully custom-built solution. However, many vendors provide robust customization features that can meet the needs of most organizations, albeit with some constraints​​.

‍

#3: Integration with Existing Systems

Building: Custom solutions can be seamlessly integrated with other internal systems, such as CRM, ERP, and document management systems, reducing friction and enhancing data flow. This integration is often more straightforward when the solution is built from scratch with the company’s specific infrastructure in mind​​.

Buying: Commercial RFP tools are generally designed to integrate with popular systems like Salesforce, Microsoft Dynamics, and others. However, these integrations may not always be as deep or seamless as those of custom solutions. Successful integration can vary based on the complexity of the existing systems and the flexibility of the RFP tool​.

‍

Time to Market and Implementation Speed

#1: Development Timeline

Building: Custom solutions typically require a longer development timeline, including stages of design, testing, and deployment. It’s not uncommon for such projects to take 6 to 12 months or longer to complete, which can delay the benefits of the new system​.

Buying: Off-the-shelf solutions can be implemented much more quickly—often within weeks or a few months—depending on the complexity and readiness of the organization. This quicker time to market can be a critical advantage, especially in competitive industries where speed is essential​.

‍

#2: Speed of Adoption

Building: Custom tools may require more extensive training and change management to ensure user adoption. Since the system is unique, the learning curve may be steeper, and the company will need to invest in comprehensive training programs​.

Buying: Commercial products usually come with extensive training resources, user communities, and support from the vendor, which can accelerate adoption. For example, companies using RFP automation software reported smoother transitions and quicker adoption due to the vendor’s structured onboarding process.

‍

#3: Market Responsiveness

Building: Custom solutions may lag in adopting new features or responding to market changes, as updates depend on internal resources and priorities. This can be a disadvantage if the market or technology landscape evolves rapidly​​.

Buying: Vendors of commercial products often push out regular updates and improvements in response to industry trends and customer feedback. This ensures that the software stays up-to-date with the latest features and best practices, without requiring additional investment from the buyer​​.

‍

Strategic Alignment and Long-Term Considerations

#1: Alignment with Business Strategy

Building: Custom solutions can be tightly aligned with specific business strategies and goals, providing a competitive edge. For example, if a company has unique processes that give it a strategic advantage, a custom-built RFP tool can be designed to enhance these processes​.

Buying: Commercial products may offer broader, more generalized features that fit many businesses but may lack deep strategic alignment. However, these tools are often versatile enough to support a wide range of business strategies, especially with the customization options provided by the vendor​.

‍

#2: Vendor Reliability and Product Longevity

Buying: One risk associated with buying a commercial solution is vendor lock-in and the potential for a product to be discontinued or no longer supported. For instance, some companies have faced challenges when their chosen software vendor was acquired or decided to discontinue a product line​.

‍

#3: Future-Proofing the Solution

Building: Future-proofing a custom-built solution can be challenging, as it requires ongoing investment in technology upgrades and adapting to new industry standards. Companies must be prepared to continuously invest in the system to keep it relevant​.

Buying: Commercial products are typically future-proofed by the vendor, who is responsible for ensuring that the software remains compliant with industry standards and up-to-date with the latest technology. This reduces the burden on the company and ensures that the solution remains viable in the long term​.

‍

Conclusion

The decision to build or buy an RFP solution is complex and depends on a company’s specific needs, resources, and long-term strategy. Building a custom solution offers flexibility and deep strategic alignment but comes with higher costs, longer timelines, and ongoing maintenance challenges. On the other hand, buying an off-the-shelf product provides quicker implementation, vendor support, and built-in scalability but may require trade-offs in customization and strategic fit. Companies should thoroughly evaluate their RFP process, future growth plans, and available resources before making this critical decision.

‍