Companies contemplating building logistics software in-house need to carefully assess the many ongoing costs involved, says Walt Heil, senior vice president of developed markets at Locus.
The threshold question for companies considering building their own technology to support final-mile strategy and goals is whether they have the requisite expertise in-house, Heil says. “Do you have the people, the resources operationally and technically, to support that kind of strategy? If you don't, you have to think about procuring them or you're going to have a resource deficit on your hands that could cause delays and cost overruns in your project.”
Since many companies don’t know if their personnel have the expertise required, they need to walk through the advantages and disadvantages of both approaches. They should be knowledgeable about best practices, and seek out examples of how others have dealt with the issue.
“We articulate to them why others decided to go with a buy strategy over a build,” Heil says. Typically, examples are pulled from the experiences of companies in the same or similar business, but even those in completely different verticals can sometimes offer best practices applicable across the industry spectrum.
Time to value is another consideration, Heil says. “What is often overlooked when determining which approach better fits your organization is when you can have at least the first iteration of the software up and running in your operations. If you can wait 12 to 18 months, then maybe your expectation would fit a build strategy. There aren't a lot of companies today that can wait 12 to 18 months. They need time to value, they need return on investment in three to six months, sometimes maybe even quicker. You have to walk them through these matters.”
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