How software sourcing can leverage your competitive advantage — if you pay enough attention

Sensor Fusion > How software sourcing can leverage your competitive advantage — if you pay enough attention

1. In-house development ensures exclusivity

2. External contract development provides flexibility

3. Software-component licensing cuts costs and time

Interim Conclusions

  1. In-house and external contract development are two sides of the same medal. In fact, I consider contract development less a software sourcing strategy, but rather a developer sourcing strategy: Shall I hire developers myself or contract a software development company which is hiring them?
  2. As software is an intangible asset, sharing investments by licensing is the key factor for cutting costs. Thus, a company who is developing a software component in-house (or by contracting) will always be more expensive than a competitor who is purchasing a non-exclusive license. This price premium needs to be justified by a higher willingness to pay from the customers.

4. How in-depth sourcing can give you the best from both worlds

Let us go back to the overview figure presented above: Comparing the different options visualizes their pros and cons: Component licensing is clearly advantageous if available, whereas developing the software yourself can be a targeted supplement. Library licensing, however, can combine advantages of both worlds.

Conclusion: Having a closer look on sourcing is worth the effort

Top of page