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Building Solutions In-House or Finding a Partner: Which Is Better? Here's What Leaders Need to Know. Both partnerships and building solutions in-house can work, but the decision of which to use boils down to providing a cohesive, all-in-one solution. Here's what leaders should consider before making a decision.

By Fady Edited by Chelsea Brown

Key Takeaways

  • What leaders should know before deciding on whether to build solutions for customers in-house or through a partnership.

Opinions expressed by Entrepreneur contributors are their own.

Customer demands are never static — what people want or need is constantly changing. Businesses that successfully embrace and adapt to these changes will find themselves on the fast track to growth. But with every evolution, companies have to consider whether it makes more sense to find a partner or create a solution for customers on their own.

Neither option inherently outweighs the other, so leaders need to understand the pros and cons of each before making a decision, which boils down to one primary focus: the customer.

Related: In-House or Outsourced? How Do You Decide?

Focus on the customer experience

Virtually every company has competition: My company, Vagaro, has several competitors on the market that offer similar services.

In any kind of dynamic environment, creating a comprehensive all-in-one solution starts with a company asking one question: What user experience does the company want to give its customers? At Vagaro, we might answer that by saying the solution has to be built in, seamless and easy to use — it should interface the same way that customers are used to seeing Vagaro interface at all levels.

Once leaders have a clear vision of the optimal customer experience, they need to make an honest assessment of the company's strengths and limitations. In our case, the strength of Vagaro is software development and automation. We have less of a focus on logistics than some other companies: businesses like DoorDash offer a service centered around the logistics of people delivering food, and Uber has logistics around their drivers.

When we're presented with situations requiring logistics-heavy features, our approach is to evaluate how we can leverage our strength in software development and automation to provide customers with that all-in-one solution. But throughout the entire process, our focus remains on keeping the customer experience our top priority.

Knowing when to build

Integrating with a partner often seems like an easy and expedient way for businesses to quickly offer their customers a solution. The problem is, the partnership doesn't always lead the business toward its ultimate goal.

Partners tend to work with multiple companies, not just one business. Because these partners are being pulled in all different directions, they can be slow with developments. Integrations often aren't as seamless as they need to be. There tend to be elements lacking, which means customers have to do some tasks manually. Companies often end up lifting all the weight, handling marketing, sales and support, too. If the business develops the solution in-house, however, they're adding to the capability based on what customers are asking for rather than being distracted by other partnership wants or requests.

Secondly, technologies like cloud services have improved to such a degree that many solutions can often be built in-house. But using these technologies takes time and additional resources. A business has to figure out if putting hours or other assets into these tools makes the most sense.

Leaders considering developing an in-house solution should first determine whether they have the people to build the solution along with the technology and know-how to move forward.

If the answer to these questions is yes, build. It might take longer to develop the solution in-house, but in the end, your business will likely have a better product than the competition.

Importantly, partners can also be a stepping stone to in-house development. For leaders unsure of the profitability or popularity of a certain solution, utilizing a partner for the short term can serve as a quick way to provide a feature and assess how customers take to the product. If customer acceptance is high, the business can feel confident they've seen enough to gauge the logistics involved and that the in-house solution will be profitable. But a company that wants to go this route should make sure they have a clause in their contract that's favorable to the business and partner eventually separating when necessary.

Related: Should You DIY or Outsource to an Expert?

Knowing when to partner

Partnerships make sense when a company needs to fill resource or skills gaps to offer customers the best experience possible. They also are the way to go if the partner can help the company use its existing strengths to a greater advantage. To assess whether a partner can support the desired five-star experience, start by reading through the partner's reviews and understanding the reputation they've created for themselves.

A good partner should also align their pricing structures with the primary company's. Consistent pricing structures are usually less disruptive for customers. They also indicate that the company and partner have a shared understanding of their market and how to sell.

Finally, businesses should assess and analyze the technology used by the partner. Companies and partners need to be evolving at the same rate so they can grow together. If a company and partner are in two different places with technology, they may have to do more work to align systems for a smooth, reliable integration. But if the company and partner are on similar pages with technology, they can usually produce an effective solution together quickly.

Multiple paths, one big picture

All-in-one solutions are critical to an excellent customer experience. Clearly, there's more than one path a business can take to develop those solutions, whether that's building in-house or partnering. And in other cases, a company might use a partnership as a way to see if longer-term in-house development is possible in the future.

In every instance, the bigger picture matters most. When considering a partnership or an in-house solution, the key is to focus on how the overall decision impacts the company's vision and growth prospects. By carefully assessing the current state and future goals of the business, leaders can identify the path that aligns with the organization's overarching plans and values, ultimately leading to the creation of a cohesive all-in-one solution.

Related: What You Need to Know Before Entering a Partnership With Software Solutions Providers


Founder and CEO of Vagaro

Fady "Fred" Helou uses creative solutions to solve common problems and has built Vagaro into a business that helps more than 150,000 service providers annually.

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