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WHY DEVELOPING YOUR OWN RESOURCE MANAGEMENT TOOL IS A BAD IDEA?
Resource management

WHY DEVELOPING YOUR OWN RESOURCE MANAGEMENT TOOL IS A BAD IDEA?

Estelle
Content manager
January 21, 2021
4 min

When it becomes necessary to invest in new resource management software - because the Excel files used until now no longer do the job - it is natural to ask whether it would not be cheaper, faster and more suitable to develop a proprietary tool rather than choose a SaaS solution. This is a legitimate question, but reality shows that the answer is usually no. Developing your own resource management tool is a bad idea, we explain why.

Because building your own resource management software is expensive

Very high development costs...

Developing a tool from scratch requires a dedicated project team (a product manager, a UX/UI designer, developers, etc.). You can either completely outsource the development of your tool or internalise it (if your company has the required skills and resources, generally IT service companies).

Here is an estimate of the cost for developing your own resource management software with the following (very optimistic) assumptions:

🛠 Developing your resource management solution will require a project team of 5 people with complementary profiles

📅 The project team will be assigned full time on the project for one year. This means 1,100 working days, considering that each person works 220 days a year on average.

If the development is outsourced

The service provider will charge an average daily rate (ADR) of about €600 per person, which is the low end of the price range offered by IT service providers. The 1,100 days of work will therefore amount to €660,000 (1,100 x €600).

If the development is internalized

If you choose to assign in-house employees to the project, the €660k that you may think you will save by not using external help will turn into a significant loss of revenue. Indeed, your employees will work full time on the development of the resource management tool and not on billable projects.

The actual cost of the project depends on the ADC (Average Daily Cost) of your employees assigned to this project. The market shows that the average ADC in service companies is €300.

NB: to calculate an ADC, divide the average annual salary of an employee by 220 (the average number of working days per year).

If we take the previous assumptions, the cost of internal development amounts to 330 000€ (1 100 x 300€).

... which lead to a precipitous development

Since the time devoted to building the solution is expensive, the project team will have to get down to basics: follow the specifications based on current needs, no more, no less, without taking the time to anticipate future changes in the company's processes. The risk is to have to handle a significant number of unforeseen requests (new needs, new rights management, new tools to integrate, etc.) while still working on V1.

Note: on top of the technical development of the solution, time should also be spent onboarding all employees to ensure that the tool is successfully adopted. Because the success of a resource management tool depends on the way it is used and the data that is entered into it, the onboarding phase is critical. For a company with 100 employees, the person in charge of onboarding will have to spend an average of one day per week on the project over a period of six months, which may be longer or shorter depending on the number of people involved in the assignment process.

Because maintenance is time consuming and your needs change

If you have developed your resource management software in-house

🕓 Time-consuming maintenance

Bug management (which is inherent to any IT project) represents a significant amount of time invested in maintaining the tool rather than on customer projects. On average, half a day per week should be spent on software maintenance at assignment. This represents 26 days of work per year, i.e. an additional 7.8k€ (26 x 300€) / year if we use the same assumptions as above. Another cost that is far from trivial but often forgotten: if the employees who developed the solution were to leave your company, the knowledge and skills needed to maintain the software would leave with them, and you would have to devote a lot of time and energy to training new people on the subject.

😪 A tool that doesn't fit easily

Just like your business and your processes, your tool will need to evolve. Over time, you will need new features that you did not anticipate during the initial development. The development and integration of these new features into your resource management software will, once again, require the assignment of a project team, with the same issues and drawbacks as those initially encountered.

✖ A tool that needs to be integrated

Adding new tools to your IT system will lead to additional developments to integrate them with your resource assignment tool. Integrations that were not anticipated from the start will be time-consuming - an average of 10 days' work for standard interfacing.

If you have externalised the development of your resource management tool

In this case, any changes you want to make to the assignment tool will require a new mobilization, and therefore additional costs. What's more, as these modifications are not instantaneous, they will lengthen the time during which you will have difficulty using your solution, with the risk of potentially reducing your assignment rate and therefore your sales.

And that’s not all

Further to the cost of developing, maintaining, and upgrading your own resource management tool, you should also consider the following points:

📃 Legal: Close attention must be paid to GDPR and data security, as personal data will necessarily be stored in the resource management tool.

🧑 User experience: the user interface must be sufficiently user-friendly to ensure full adoption by all employees and an efficient assignment process. All too often, this is overlooked to shorten development time and the tools developed end up being abandoned because no one uses them. A total waste of time and money.

❌ Risk of errors: A poor appreciation of all the particularities that need to be taken into account in the parameters of the resource management tool can lead to significant business losses and/or distort your analyses. A resource management solution developed by experts will allow you to integrate without risk all the specificities of your business or your company's structure.

Save time (and money) by discovering how Napta can meet your specific assignment needs.

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