Checklist for Ag Companies Considering Software Development

Posted in: Technology     

As agricultural technology leaps forward, there is a common conversation occurring in board rooms across the world that boils down to one simple question: Should we buy software or build it?
As companies wrestle with this key strategic decision, they should consider the following:

• What is your starting point? Does the company already have significant software resources in-house? The IT resources that most companies employ are not the same skills that are required to develop code and user interfaces.

• What is the ongoing commitment? There is no such thing in software as a one-time development fee. Once you build software, you must factor in the ongoing maintenance and upgrade expenses.
Is software an area of expertise that you plan to make core to your business? A better question might be, do you want to own a software division as part of your corporate structure? If you don’t see the revenue potential, buy from someone else.

• How will you handle IP (intellectual property) issues? If you buy the software, you won’t own the IP, but that isn’t always a requirement. Registering, building, and protecting IP is an expense line of its own. Use revenue generation as a guide.

• How will you address the mobile component? Most teams will claim that using HTML5 to optimize your website for mobile devices is a cheap answer, and it is, but you get what you pay for. Native mobile applications provide better user experiences and work without connectivity (vital for rural users).

At the end of the day, you don’t want to choose to build your own software and own your own IP only to outsource the entire project. This is the worst of all solutions.
Here are some tips on making the right choice for your company:

TIP 1: Consider data security as a separate issue.
Too many companies solve the buy vs. build question by saying that they simply can’t trust anyone else with their data. They focus on the data security issues to the exclusion of the above considerations and default to building software in order to feel safe. They end up owning all of their data and feeling safe, but they build software products that no one uses.

TIP 2: Consider the competition. The typical software provider will employ a few dozen developers (at least) that work on delivering product improvements every two to six months.

TIP 3: Consider the schedule. If someone tells you that it is possible to create category-leading software that thousands of customers will love and use in less than two years, they aren’t being honest. Building great software is like building a great building — the architectural planning phase is significant.

TIP 4: Consider financial resources. Let’s assume a development team of 10 is a good starting point. Let’s further assume a fully loaded cost of $100,000 per person (a bit low, but a good round number). That means that even small development teams should have over $1,000,000 in funding to get started.
Software is like most business projects, we want it to be cheap, fast and high quality — but that isn’t possible. Cheap and fast? Easy. Cheap and high quality? Ok, but I need a few years. High quality and fast? Sure, but get your chequebook out!

Farmers will not use 20 different software programs. With every major crop input and equipment manufacture spending millions on software development, you have to ask: Will small programs that address specific problems be used on the farm? Will my solutions be unique enough to beat out the other options in the market? Can I keep my software up with the pace of the industry?
Benjamin Allen

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