Why you don’t have to pour thousands of dollars to implement your subscription billing software?

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Summary: When it comes to SaaS success, the time you launch can mean the difference between generating positive or negative revenues. Before launch, many startups face the dilemma of whether to build or buy their own subscription billing software. Should a startup buy or build their own billing system?



Build Vs BuyFor SaaS businesses, one of the critical but non-core wheels of the business is the subscription billing system. When you are ready to take your app to the market, you need a solution that will enable you to accept payments online. Some companies opt to build their own billing systems. However, the majority are choosing existing software. Unfortunately, when it comes to billing matters, there is no “one-size-fits-all” answer. Your unique circumstances should help you determine whether to build or buy.

But first things first. Let’s look at the importance of launching in a timely manner.

Importance of Timely (Fast) Launching

Unless you have a unique product in a market with no competition (which is highly unlikely), you should buy an existing billing solution. The time-to-market advantage is very crucial to the success of your business. According to discussion on HBR, one of the reasons product launches fail is delays in launching. Delays can give rise to more efficient and beneficial products, thus rendering your product obsolete. This is why it is important to move fast and get your app out in the market.

But more than the possibility of your solution being rendered obsolete at the time of launch or stiff competition, there are other factors you should consider when looking to buy or build a billing software. Below are some considerations:

a)  Time to Build

Time is crucial when launching. You should consider how much time you have when weighing whether to build or buy. If you are about to launch and need a billing software in about 3 or so months, it makes sense to buy. The time it takes to build a billing system can ruin your business if you need to start selling right away.

In most software projects, there are unexpected delays. These delays can disrupt your launch schedule and affect the uptake of your SaaS service. When launching on time is critical, you don’t have the time for extended software deployment times. Go with a built system to avoid unexpected launch delays.

b)  Cost to Build

Most startups operate with limited funds. Therefore, founders need to find the best way to allocate the funds for critical business processes and operations. Building your own billing system can be expensive. For example, you have to comply with various regulatory requirements such as PCI-compliance, cater for the cost of infrastructure like data centers and so on. For all these requirements, you will have to dig deeper into your capital, and in turn affect the allocation for other critical operations such as product development and customer care.

c)  In-House Talent

If you have in-house developers, building a recurring billing system may seem viable. However, most startups start with lean teams without full time developers. And don’t think that your single developer will be able to handle all the work by himself. Thus, you will often need to hire more developers to crank out the code for the billing system.

The cost of paying fulltime in-house developers can eat into your capital. But more than just the financial implications of hiring fulltime developers, you will waste time interviewing, training and hiring new programmers.

d)  Opportunity Cost

The opportunity cost of doing business also has to be factored in. Would you rather use an already-built system that is cheaper from the start or build your own software that can cost tens to hundreds of thousands of dollars to develop? Even if you already have in-house developers, there is still an opportunity cost. The time the developers will use to build the recurring billing software could have been used better for product development.

Why waste your time building a software that is already available in the market instead of concentrating on bettering your SaaS service?

e)  Maintenance Cost

After you succeed with creating a recurring billing software, you will still need to maintain it. Regular updates and patches will be necessary to secure the software and ensure it is up to the recommended industry standards. You will also have to deal with downtimes, buggy code, conflicting integrations and so on. All these cut into your time and financial resources, deviating you from your core business.

Given the time and resources, any company can build their own recurring billing software. However, the benefits of buying far outweigh those of building, especially for startups or companies looking to keep their costs down. The above are some of the reasons why you should opt for already-existing solution rather than build your own billing software.


Posted on December 2, 2013

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