Build vs Buy: What to do for your In-App Communication Needs?
Huh! To Hell with it! I Don’t Need In-App Communication! Well, we urge you to think again.
80% of mobile time is spent on apps. Mobile has become the primary medium for User Acquisition, Monetization, and Engagement/Retention for businesses. In fact, many businesses have also rolled out mobile apps for internal team collaboration and management.
Given the enormous popularity of personal messaging apps – WhatsApp, WeChat etc its clear that messaging is the preferred mode of communication. Taking the concept of messaging a bit further to mobile chat, a recent study reported that 79% of mobile app users would engage with the brand inside a chat. This presents a massive opportunity for businesses to engage with users and increase brand loyalty.
While we all agree that the in-app messaging has become the utmost necessity for user engagement, most businesses find themselves at the crossroads “Buy it OR Build it”. The danger in building internal tools is that it needs constant parenting and incremental cost. The makeshift homegrown solution turns into a few weeks of “getting it just right” which later turns into couple of months of distraction for your engineers as they tweak all the random edge cases no one considered.
The bottom line – you end up spending literally hundred of hours building a tool which is neither core to your own business, nor one that helped you save any money. Even worse, you utilized your engineering resources elsewhere, while they could have been used to improve your core product which would have ultimately driven revenue for your business.
Quantitative Analysis of Build vs Buy:
The overall expenditure involved in developing a homegrown Messaging Suite for your mobile app, illustrated below, proves that even monetarily DIY is a bad use of your resources:
- The price to develop a similar app like WhatsApp on iOS platform is approximately $26,400.
- The price to develop a similar app like WhatsApp on Android platform is approximately $26,400.
- Enabling CMS and Web Services, would cost approximately $16,800, thereby making the total investment approximately $69,600.
Congratulations! You spent 69,600$, an amount that could have given you access to Applozic’s Growth plan for 16 years at 369$/month.
Surprised, well it doesn’t end just there. While your engineers were busy making the Messaging Suite they were actually not concentrating on making your own core product any better, and sadly this continues for 3-4 months which is the average time required for developing an In-App messaging feature.
Now lets say you had a recurring revenue of 20,000$/month and growth at a rate of 10% month-on-month, will amount to recurring revenue of 63,000$/month at the end of a period of 12 months. However utilizing your engineering resources in building a core platform capability, that could reduce churn or expand your market size, could have bumped your growth to say 11%. That would have meant 70,000$ worth of recurring revenue in an year.
Thus building your in-house In-App Messaging solution not only resulted in saving an insignificant amount of Cash, but also stifled your growth and future cash flows.
Qualitative Analysis of Build vs Buy:
Apart from the obvious monetary and resource implications, there are many more decision points that one should look into, before zeroing in on the final decision of Build vs Buy:
- Completeness of Messaging Features: Building In-App chat that enables companies to build highly engaging mobile apps is a non-trivial task. Limited forecast of the scope, and
non-familiarity with available chat protocols might result in overlooking any of the requisite Use Cases like offline notifications, background app processing, addressing Customer Support, surveys etc. Each of these new capabilities can result in extended development & testing timelines, hence it is important to assess the in-house expertise before embarking on a Build Strategy.
- Multi-platform Support: Any in-app chat capability you build must support both iOS and Android, which means familiarity with the features and quirks of APNS and GCM respectively. Most businesses tend to hire and manage two separate teams for each platform, which can get costly especially if they each now have to also learn how to build messaging capabilities. Furthermore, this process gets more onerous if you add support for web messaging to the mix.
- Scalability: A cloud based SaaS solution like that of Applozic can help you to scale and pay as you grow.
- Integration with Enterprise Systems: Most backend system such as CRM or ERP require custom implementation, hence need in-house expertise. Thus it is important to to utilize your in-house development resources – on delivering seamless back-end integration rather than building a standalone messaging capability.
- On-going development and Support: If adopted, messaging and chat capabilities can go viral very quickly and become a core component of your users’ experience and a driver of business growth. Thus development of a Messaging Suite for your mobile app is not the end, it needs to be maintained just like any other core product capability that offers you competitive advantage. This would require additional recurring resources both monetary and human, unlike in the case of a SaaS solution where every new release will automatically upgrade your platform capabilities.
The Role of Messaging in the overall User Experience:
When time to market is critical, you need to decide if it is more important to focus your developers’ time on designing the best possible user experience or on building standalone in-app chat capabilities. If in-store app reviews and net promoter scores are a KPI, then user experience wins every time!
It is very important to have a strong understanding of the Business Goals and a deep assessment of the technology needed to achieve them before making a Build vs Buy decision. Ask yourself, “Do I work for a technology company that builds systems software or is my core business something else – manufacturing, retail, healthcare,eCommerce etc., and where should I invest my resources?”
If you belong to the second category, it is advisable to outsource and be done with all the worries for ever.
At Applozic Inc. we offer highly customizable and easy to scale, White Label SDK that helps to integrate chat in Web and Mobile apps be it on iOS or Android. Sign Up with us, and enable your web and mobile apps with our end-to end Communication Platform. Visit our Feature’s Page to learn more about our offerings. Feel free to contact us at firstname.lastname@example.org for any queries and we would be happy to help.
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