There are many reasons owners and operators in the Commercial Real Estate (CRE) industry think about building a fully integrated property tech stack in-house versus acquiring fit-for-purpose technology. For years there’s been a hot debate around the build vs buy dilemma. While both approaches have distinct advantages and disadvantages, advancements in Vertical SaaS have brought about many new advantages impacting an organisation’s operations, costs, and competitive positioning.
What is Vertical Saas?
Vertical SaaS is software as a service that’s built with a specific industry or vertical in mind. The software is curated by industry experts and is purely focused on solving vertical-specific challenges. They’re not off-the-shelf or out-of-the-box functionality but are adaptable to your business, as they’re built for the problems you’re trying to solve. The benefit of this type of technology is that you can tap into a product influenced by multiple businesses in the same industry. The challenges these businesses face are similar by default and this type of technology is easily able to stay ahead of the curve.
The technology solutions that have the biggest impact on any business’ bottom line are those with a proven track record and a trusted customer base. When we look at the CRE industry, vertical-specific solutions have been used in, and developed for CRE companies. They’re purpose-built and as a result, have a reduced risk of failure of adoption.
Technology that’s being paid for but not used, often because it’s not fit for purpose, is a bigger detriment to a business than not having the technology in place at all.
Key considerations for a DIY tech stack
When considering whether building your own tech stack in-house is a potential option for you, there are some key factors to keep in mind.
- Cost: Building out your own tech stack comes with a high investment, and although it offers a chance for a bespoke offering, it also comes out 5 times more expensive. It can also be hard to control the costs from increasing headcount and budget, from development all the way through to ongoing opex.
- Time: Whereas VSaaS options include predefined functionality and processes which allows for a rapid integration, DIY technologies have much longer development timelines, potentially delaying time-to-market and competitive positioning.
- Resource Allocation: Whatever time and resource allocation you have, you’ll more often than not need to extend them out. Don’t underestimate the internal resources that are required, which may divert headcount from other strategic initiatives.
- Risk: While development delays and budget overruns are one thing, there’s also the challenge of keeping the technology up-to-date with evolving industry standards. VSaas is invested in the success of the industry, meaning continual product investment is a given.
- Scalability: Build-your-own tech can never just be one-and-done if you want to keep up with your rapidly changing environment. This means reallocating resources and budget every time updates are needed, requiring continual investment in development and infrastructure.
Look at your asset or portfolio holistically and ask yourself:
- Do you and your team have the time to maintain integrations?
- Does building your own solution give you the agility to mold your tech stack to what you need?
- With secure solutions on the market, is 5x the cost worth it?
First, build your internal business case
Choosing between building an in-house tech stack and acquiring fit-for-purpose technology depends on several factors, including the company’s specific needs, available resources, timeline, and long-term strategic goals.
- Build in-house if your organisation requires highly customised solutions that VSaaS can’t offer, can afford the investment, and has the necessary expertise and resources to maintain and scale the technology.
- Acquire technology if speed, cost-effectiveness, and leveraging external expertise are more critical, and if your needs can be met by existing solutions with multiple integration abilities.
See also
FAQ
What factors should be considered when deciding between building or buying software solutions?
When choosing between building or buying software, consider factors such as development costs, time to market, available in-house expertise, scalability, and long-term maintenance. Building allows for tailored solutions but requires significant resources and time, while buying offers quicker deployment with potentially less customization. Evaluating your organization’s specific needs, budget, and strategic goals is essential in making the right decision.
How can Kinexio’s platform benefit property managers in the build vs. buy decision?
Opting for Kinexio’s platform provides property managers with a ready-to-use, scalable solution that enhances tenant engagement and streamlines operations. By choosing to buy rather than build, managers can save on development costs and implementation time, allowing them to focus on core business activities. Kinexio’s proven track record and comprehensive features make it a strategic choice for efficient property management.