Vendor Lock In: Risks and Solutions
by Alexander Huber
In today’s business environment, decision makers often face a choice. Should we build our own software or buy a commercial product? The article Make or Buy for Time Tracking Systems already covered the fundamentals of this decision. One point that is especially critical when choosing commercial software is the risk of vendor lock in. How can you reduce this risk and still benefit from commercial solutions?
Risks of vendor lock in
Limits in further development
If a company selects commercial software, internal development and maintenance effort may decrease. At the same time, you give up part of the control over the product’s future. The software might not get the exact features your company needs. This can be difficult if the vendor sets other priorities or takes the product in a direction that does not align with your business needs.
Dependence on the vendor
Another aspect of vendor lock in is dependence on the software vendor. Price changes, changes in service quality, or even discontinuation of the product can have a strong impact on the company. This can lead to unexpected costs and operational challenges.
Solution: Customizable commercial software
Deep customization
A promising approach is choosing commercial software that offers deep customization. This goes far beyond adding fields and allows you to tailor the system thoroughly to your needs. Such systems are still maintained and updated by the vendor, so you benefit from regular updates and ongoing product improvements.
Benefits of customization
- Develop your own features: Companies can build features that may not be relevant for other customers. This enables a unique path and helps you stand out from competitors.
- Build know how: By customizing the software, teams build internal knowledge and technical expertise. This strengthens independence from the vendor and increases flexibility.
- Vendor support: Ideally, the vendor supports these customizations with resources and knowledge to adapt the product to your situation. This can include training, documentation, or specialized support.
A strong and stable core
Commercial standard software should offer a strong and stable core. For time tracking software, features for project time tracking, attendance tracking, leave management, and compliance must be present and largely available out of the box. These areas should offer extension points where possible, so you can adapt them to your company. This is the advantage of commercial software compared to building yourself. You avoid the heavy lifting for components that are similar for most companies.
Positive side effects
Innovation
With the ability to develop your own features, companies can act in a more innovative way. They can respond faster to changes in the organization such as growth or restructuring without waiting for the vendor’s release cycles.
Cost control
Customizations may create initial costs, but they enable better cost control over time. Companies can invest in features that deliver direct value and optimize total cost.
Competitive advantage
Tailored features can be a competitive advantage. They support unique processes and functions that standard products do not cover. This can improve efficiency and open new market opportunities.
Conclusion
Choosing commercial software comes with a risk of vendor lock in. Customizable solutions help reduce this risk while keeping the benefits of commercial software. Deep customization enables companies to create their own features, build know how, and set themselves apart. With the right support from the vendor and a clear understanding of the company’s needs, customizable commercial software can be a flexible and future proof solution. A careful analysis and consideration of all relevant factors is essential to make the best decision for the company.