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Do Not Develop Your Own Online Payment System
Quality of Application
No organization today builds their own word processing application,
they purchase Microsoft Word or Corel WordPerfect, which are far cheaper
and superior to anything that could be developed in house. Publicly
licensed software designed for mass consumption is generally superior
to applications developed in house primarily because of economies
of scale. Why would an online invoicing solution be any different?
If you do decide to develop your own solution it is clear that the
security, features and reporting capabilities will not be as robust,
stable or as user friendly as a professionally developed application
built by specialists.
Interface Design and Customization
Perhaps the number one reason many SMB's choose to develop an in-house
solution is so that they can design and customize the user interface
to fall in line with their corporate identity. You may have noticed
that some (roughly 10%) of shopping cart applications will redirect
users to external pay pages during the checkout procedure. The other
90% consciously decided to incur other additional costs to ensure
their shoppers are not forced to leave the familiar environment of
their shopping cart during the payment process. To ensure this, each
one has born the additional cost to purchase an SSL certificate ($200
to $700 US annually) and to develop a payment plug-in, which necessitates
a proper software development cycle (including specification design,
build, test and installation) which costs in the range of $2,000.00
to $5,000.00. These costs alone can finance years of service from
an online invoicing application service provider.
Direct Costs
There are high costs associated with developing your own online invoicing
system. Looking at the tasks involved, it is easy to see why. A typical
online application development project would likely have at least
some of the following tasks, if not more:
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Needs analysis assessment |
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Business process fit-gap analysis |
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Application interface design
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Database design |
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Technology assessment, costing and procurement |
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Server and security setup |
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Application build |
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Application Testing |
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Pilot Rollout |
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BETA Testing |
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Production Rollout |
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Ongoing Support and Maintenance |
If outsourced, projects of this nature will take at least four
to eight months to complete and cost from $10,000.00 to $250,000.00
depending on the complexity of the application and the security level
required.
Indirect Costs
Furthermore, many application development project costs are hidden.
Redirection of resources is one example of a hidden cost that often
goes unaccounted for. Every hour your team members spend developing
an invoicing system, they could be focusing on your core business
activities. Also, if your team members are not experienced in online
invoice application development, there will be a high learning cost
added to the project, and without question, increased chance your
project will fail.
Risks
Author Julia King stated that for companies that are not among the
top 25% of technology users, thirty percent of all technology projects
fail.(i) The good news is that 70% are successful; however
Julia did not research how many of those successful projects went
over budget. Some research indicates as many as half of all IT projects
go over budget. If your company is not among the top quarter of technology
users, chances are your online application development project is
in jeopardy of failing and/or going over budget. Worse still, it is
most likely your final product will be of lower quality and security
than one developed by a specialist.
Maintenance
Online applications demand ongoing maintenance, and in rapidly evolving markets like e-commerce, constant change. This maintenance - which can include bug fixes, transitions to superior technologies, server patches to name a few - is a source of organizational stress and in most cases best outsourced to specialists.
Security
Application security is defined by the application design, the technology
selection, the safeguards implenented and by the team who vigilantly
monitors the application 24 hours x 7 days a week. Most SMB's do not
have the resources to adequately invest in these areas of a project.
They only have the resources to achieve the necessary functionality
the applications demand and have to sacrifice security. Proper
investment in expert developers, testing, dedicated firewalls and
round the clock monitoring are all costly components of a secure online
application.
Services and Storage
An online application hosted in-house will have costs that can easily
be overlooked when initial specifications are done. There is the cost
of the space and setup required for a secure and stable server room.
Some may say that they have already spent this on their current server
room, but adding business critical servers may tip the limits of your
current server room configuration. Adding more online servers inherently
increases your risk of security threats your entire network from viruses
and hackers. In addition, a brief power failure could cost your IT
staff - and the rest of your business - dearly when you are hosting
your own solution. Another necessary cost when hosting your own solution
is the time and money required to do proper backups.
Considering all the reasons mentioned here, and all the reasons not
mentioned, it is clear that developing your own online invoicing and
payment system is a high cost, high risk undertaking. Will your business
be able to afford development and hosting costs when they hit your
bottom line? Do you even have the capital and the know how to consider
developing your own solution? You owe it to your business to do the
research, consider every direct and hidden cost of developing your
own system, and then to take a good look at the alternatives. If you
still think you need a customized solution, contact 2ndSite's customized
application development partners and benefit from the experience
and already built assets they possess.
(i) King, Julia. "Survey shows common IT woes", Computerworld, June 23, 2003
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