It is the process where the company uses their own workers (in-house team) to develop ot implement an IT system that fits the specific needs of the company. This process allows for the creation of a more customized system that can have an exact fit in the company due to the direct contact between the software developer team and the people that could be using the system.
This approach requires that the company possess a group or a team of programmers and business analysts that can work together within the company with a common reporting line which makes it easier to coordinate between the teams. The individuals in these teams should be experienced in developing and implementing IT systems and have a thorough understanding of the company’s business processes and once it is implemented, it should be able to maintain as well as to improve the system to adapt the
changing business requirement.
Advantages of in-house development
1. Company has full ownership of the final product as well as its source code and knowledge gained when developing it.
2. Fits exactly to the business requirements of the company.
3. Gives you full control over the system and its functionality.
4. Creates a relationship between the development and users base which help in communication and expectation delivery.
5. Can provide the business with a competitive advantage over a purchased solution.
Disadvantages of in-house development
1. Its time consuming to develop an in-house business software as opposed to buying it.
2. There is high maintenance and development cost- though it may seem less expensive, in-house development can actually become more expensive as time goes by, as there are a lot of things that go into the process such as analyzing requirements and perfecting the
3. Requires more IT personnel which leads to high overhead costs
4. If the organisation decides to sell the system it may suffer from lack of profitability as the system may be too tightly build into the identity of the company.
5. High switching costs – It’s more expensive to change.
Factors to consider when purchasing e-procurement systems
1. Cost – implementation and maintenance
2. User friendly interactions
3. Performance- meet user requirements
4. Compatibility- compatible with existing system requirements
5. Flexibility- can change in regard with market environment.