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Build vs. Buy Master Data Management Software

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January 28 2022 |
4 minute read

Master data management software: build or buy? The complete guide

When it comes to implementing a master data management software solution, organizations have the option of either building one in-house or buying a pre-built software solution from a vendor. Both options have their own set of advantages and disadvantages, and the choice of which to go for will depend on your organization's unique needs and resources.

In this blog post, we will outline the major advantages and disadvantages of building vs. buying a master data management software solution. Also, we take you through the six most important questions to consider, when making this decision. Finally, we will provide you with evaluation criteria for selecting a vendor or building in-house such that this blog post cover all the key considerations that will help you make the best decision for your organization.

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What are the advantages and disadvantages of building vs. buying a master data management software solution?

The advantages of buying a master data management software include:

  1. Proven functionality and capabilities: Buying a master data management software means that the product has already been tested and proven to work effectively, reducing the risk of implementation failure.

  2. Time and cost savings: Buying a pre-built software can save a significant amount of time and money compared to building one from scratch.

  3. Access to expert support and maintenance: When purchasing a master data management software, organizations will have access to expert support and maintenance to ensure the product is running smoothly and any issues are resolved quickly.

  4. Regular updates and upgrades: Buying a master data management software means that the product will be updated and upgraded on a regular basis to ensure it remains current and effective.

  5. Scalability: Buying a master data management software can provide the flexibility to scale up or down as business needs change, providing a scalable solution to meet the organization's future needs.

The disadvantages of buying a master data management software include:

  1. High costs: Buying a master data management software solution can be expensive.
  2. Limited flexibility: Purchasing a commercial master data management software solution may not be able to meet all of the organization's unique requirements.
  3. Dependence on the vendor: By purchasing a master data management software, organizations may be dependent on the vendor for support and future upgrades.
  4. Potential difficulties with customization: Buying a commercial software solution may not be as easy to customize as a home-grown solution.


The advantages of building a master data management software include:

  1. Customization: Building a master data management software allows organizations to tailor the solution to their specific needs and requirements.

  2. Control: Building a master data management software gives organizations more control over the development and maintenance of the software.

  3. Integration: Building a master data management software allows organizations to easily integrate the software with their existing systems and infrastructure. However, most vendors offer integrations to a broad variety of systems today.

  4. Cost savings: Building a master data management software can potentially be more cost-effective in the long run as organizations can avoid ongoing licensing fees associated with buying a solution.

The disadvantages of building a master data management software include:

  1. High development costs: Building a master data management software solution is highly expensive as the organization needs to invest in the necessary resources such as developers, hardware, and software.
  2. Increased time to market: Building a master data management software from scratch takes longer than buying an existing one.
  3. Limited functionality and scalability: A home-grown solution may not have the same level of functionality and scalability as a commercial master data management software solution.
  4. Difficulty in integrating with other systems: Building a master data management software solution may not be as easy to integrate with other systems as a commercial solution.

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6 questions to consider when deciding on whether to build or buy a master data management software solution: 

1. What are the requirements of this software?

These are likely to change over time, but what are, for example, you business and architectural requirements?

2. Are your business requirements urgent?

Do you have enough time to dedicate your in-house resources to building a solution?

3. Have you analyzed your existing technology landscape?

Are there perhaps other teams in your company that have similar needs?

Do you have existing technology that could address the requirements?

4. How will the solution be supported? By whom?

Who are your business stakeholders, and how should your software solution be supported from a technical standpoint?

5. Do you have the available in-house resources to create the software solution?

Do you have enough in-house expertise to build a system, synthesize the requirements, architect the solution, debug the software, and also plan for future needs and scalability?

6. Will your data software solution be tactical or strategic? 

Your IT staff may be able to meet a current need, but can that solution scale to also meet future needs

These six essential questions on whether to buy or build a master data management software, will provide you with an overview of the advantages and disadvantages attached to each solution. Thus, when having answered all these questions, you will have found the optimal solution for your organization in terms of whether to build or buy your master data management software solution. 

 

Evaluation criteria for selecting a vendor or building a master data management software solution in-house

Key evaluation criteria for selecting a vendor or building a master data management software solution inhouse could for example include the following: 

  1. Data governance and management capabilities: It is important to consider how well the vendor or in-house solution can handle data governance and management tasks such as data quality, data lineage, and data security.

  2. Scalability and performance: The software solution should be able to handle large volumes of data and provide fast performance.

  3. Integration with existing systems: The vendor or in-house master data management software solution should be able to integrate with existing systems and data sources, such as CRM and ERP systems.

  4. Data modeling and transformation capabilities: The software solution should be able to handle data modeling and transformation tasks, such as data mapping, data cleansing, and data integration.

  5. User interface and ease of use: The master data management software should have a user-friendly interface that is easy to navigate and use.

  6. Technical support and maintenance: The vendor or in-house software solution should provide adequate technical support and maintenance services to ensure that the system is running smoothly and that any issues are quickly resolved.

  7. Cost: The vendor or in-house master data management software solution should be cost-effective and provide value for money.

  8. Flexibility: The software solution should be flexible enough to meet the specific needs of the organization.

  9. Technical expertise: The vendor or in-house team should have the necessary technical expertise to support the implementation and maintenance of the system.

  10. Security: The master data management software should provide robust security features to protect data from unauthorized access, breaches, and other threats.

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Katja is a seasoned digital strategist with a 10-year track record of helping businesses across different industries drive digital growth and improve their digital experience.



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