The Benefits of a Cloud Solution vs. a Homegrown Solution

The Benefits of a Cloud Solution vs. a Homegrown Solution

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Author: Mirza Baig

The current economic slowdown due to the COVID-19 pandemic can be viewed as an opportunity to evaluate existing systems and implement effective solutions that work best for your customer-facing teams. This may be a perfect time to consider a Configure, Price, Quote (CPQ) cloud solution and replace your outdated homegrown solution. 

CPQ allows for easy product configuration, quick quotes, and accurate pricing. It allows your sales team to securely access enterprise-grade software anytime, anywhere, and on any device. With proper access rights, the CPQ solution can also allow customers to easily view their quotes online and accept it right within the tool. 

As more companies adopt the Work-From-Home (WFH) model, they can easily undergo digital transformation with a cloud-based solution. Cloud solutions do not require your IT infrastructure as software vendors are responsible for it. The implementation team needs to understand business requirements and set up the solution right in the cloud application.

The Growing Pains of Legacy Solutions

First, let's quickly review what is a homegrown or an in-house solution and when does it become a legacy solution.  

Unfortunately, many companies operate a homegrown solution that does not integrate well and is expensive to maintain over the long-term. These homegrown solutions are custom-tailored business software applications built by the company's own IT team. Instead of licensing a standard packaged software application from a software vendor, some companies develop their own solutions. 

This homegrown solution is also referred to as an “In-house” developed solution. Most of these homegrown solutions end up not being maintained to the growing security risks, new technologies, and user-experience expectations. Once they’re outdated like this, they are also called a legacy system. 

Legacy systems may still work but could be missing out on the latest features and functions that are available in modern software or a specific industry.

Administration and support for both homegrown are largely dependent on the IT team. The overall maintenance is strictly dependent on a very small group of people, the programmers who built it. 

Documentation is usually not updated after the initial build and solution deployment. This makes it difficult and time-consuming for someone else to figure out where to look for code, specific algorithms, and business rules. It’s almost like finding a needle in a haystack.

Depending on the scope, complexities, number of users, etc. homegrown solutions can have large upfront costs. Besides the infrastructure such as the hardware, software (operating system, runtime environments, etc.), backup and storage costs as well as upgrades to hardware/software, they also require a lot of builds and test effort compared to a standard cloud solution such as SAP CPQ.

The biggest challenge with homegrown or in-house developed solutions is the culture of building anything a company requires. It’s like having a blank slate without any constraints. Solution architects and developers can keep adding every little feature a business desires. Over a period of time, the whole in house developed solution becomes way too complex. Maintaining and integrating with other solutions can be a nightmare. Not to mention that if the programmers leave then there is a huge learning curve for the new hire, due to the custom nature of the solution.

Other challenges with homegrown solutions that must be considered are governance, compliance, audits, currencies, languages, taxes, calendars, market factors, workflow, approval notification, delegation, access rights, user groups, integrations and system performance - just to name a few.

The Standard Software Solution by Independent Software Vendors (ISVs)

CPQ solutions backed by software vendors such as SAP, management can have peace of mind. Their solution not only overcomes the above-mentioned challenges but is also backed by an army of developers, testers, and support teams. 

These commercially available softwares are referred to as “Packed” or “Pre-packaged” solutions. Some may even call them a “Canned” or “Off-the-Shelf” solutions. They offer a wide variety of features and integrations without having to do custom development by programmers.

When this packaged software is cloud-based, it’s usually offered as a Software-as-a-Service (SaaS) offering. SAP CPQ is a SaaS business application. This means the software is always upgraded by the vendor, so companies are automatically on the latest software version. The new features and patches are released every quarter by SAP.

Sales managers and leaders today like to have less reliance on IT, especially for the small day-to-day support tasks. SAP CPQ is easy to support, so a business user can perform everyday admin tasks, without the need for IT assistance.

Using a commercial software solution means you’re not at the mercy of a handful of developers who created your homegrown custom application. Instead, CPQ business analysts or administrators can be easily trained to support the system. There are lots of online support (help/forums), training, certification, and self-paced learning management systems to assist your admin as needed.

Final Thoughts

Most businesses believe that they’re different and require custom in-house developed CPQ applications to support their business processes. They think a standard “packaged” software may not work for them, even though it may be working very well for their competitors or other companies with more complex requirements. 

Commercially available cloud solutions could mean agility, security, compliance, user acceptance, mobility, and reducing the dependence on IT and developers. It also provides companies with new features and functionality every 3 months, which they can choose to enable. 

To learn more about how SAP CPQ can benefit your business, reach out to us at