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One of the first major decisions a project manager needs to make is whether she will develop a software solution using in-house talent, or choose an off-the-shelf product to meet her company's needs. Both solutions can be correct, depending on the circumstances.

Here are some questions to consider:

• How experienced are you as a project sponsor, and what kind of developer talent do you already own?
  If you have never managed a large software project before, take advantage of the expertise of an established vendor who has guided other clients through the same process many times. Also, right before you begin a large project is not the time to be placing want ads for developers on job boards.

• How central is the project to your core business?
  If you can see the skills used to develop this product being used elsewhere in the company and being useful in the future, it may be worth investing in developer talent.

• How important is it that you have a solution that fits your business exactly; and how close can you come using an off-the-shelf product?
  In almost every case, you will be able to create a more customized solution by building a home-grown product than you will be able to buy. Only by doing thorough research will you be able to determine which off-the-shelf products on the market come closest to addressing your business needs, and whether the customization required to make them perfect is extensive or minimal.

• How complex is the task, and what is your time horizon?
  If the programming required is complex relative to the amount of time available to complete it, buying a solution may be more efficient, depending on the amount of customization required.

• How established are the vendor and the market you are considering, and how well regarded are the existing solutions?
  For example, let's say you needed an operating system for an unformatted hard drive you bought online. Would you hire a team of developers to write one? Unlikely — there are already several well-established alternatives (Windows, Macintosh and Unix flavors, for instance), which are readily available and thoroughly tested. Choosing between content management solutions written by six-month-old startups is murkier. If your feeling is that the company that wrote the product won't be around a year from now to support it, you may lose your "buy" investment.

• What is your budget, and where would you like to spend that money?
  There are always going to be costs associated with large development projects: Whether you build or buy, you will have to pay for the server space, database, network infrastructure, quality assurance testing, and user training that the project requires.

Let's Talk Costs

Costs specific to an off-the-shelf solution include up-front licensing costs; and, depending on the project, possible on-going licensing costs; customization fees; and upgrade costs. You will also need to make a decision as to whether you will outsource product maintenance or train developers to maintain the product in-house — what happens when version 2.0 becomes available?

Costs specific to a product developed in-house include developer salaries and benefits, possibly including training for developers if they are using new technology; additional infrastructure costs associated with maintaining development and testing equipment; and on-going code maintenance and bug fix costs.

In general, maintaining a staff of developers is the more expensive solution, but also the one that places the greatest amount of control in hands of your business. On the other hand, buying a solution off the shelf can be less costly (though customization can run up bills quickly), and may also be faster to implement and require less infrastructure, but places responsibility for code stability outside the company and is, by definition, less specific to a particular company's needs. If neither building a solution nor buying one seems right, hiring an external consultant or combining multiple off-the-shelf products may allow you to get the best of both worlds.

A major software project should be viewed as a lifetime investment. If the software works, it will probably be around for years. Investing the time up-front to make the best decision about how to implement the project could have long-term business rewards, so consider carefully.