In 1993, international tyre company Pirelli released an advert with the tagline, ‘power is nothing without control’. This rang true across all industries, including the financial services one. In fact, while choosing the right financial software is slightly more complicated than picking out new tyres for your car, the sentiment is the same because without being in control, certain things – including costs – risk spiralling.
The Four Main Components of Financial Software Costs
In a nutshell, the four things you need to look at in terms of costs are:
- The cost of buying it ready or developing it
- The cost of training your team on how to use it
- All the running costs to use it and keep the service going
- Any maintenance costs required to keep it up-to-date for any future needs
Let’s look at how each of these can affect you.
1: The Cost of Buying It Ready or Developing It
There are several options when it comes to open-source software available on the internet, including Python and R. Nevertheless, while these come at no cost, you will still need to tweak and update the software to your scope. In fact, as a rule of thumb, a free framework requires more development investment compared to enterprise solutions under licence cost. This means that the internal development cost – both in terms of time and money – could be more than that of an enterprise solution, though this varies on a case-by-case basis.
2: The Cost of Training Your Team on How to Use It
How much training your team will need to use a software depends on the software’s user-friendliness. Unfortunately, most open-source solutions are not particularly easy to use, especially by those who do not have any programming skills. More importantly, this doesn’t just mean initial training but also the acquisition of long-term skills that can help you maintain and update your software. Adding the fact that employing new staff with the right programming skills could be expensive to this, you can easily see how costs could increase manifold before you even start using the software.
3: All the Running Costs to Use It And Keep The Service Going
The running costs of commercial, off-the-shelf software depend on the one you go for, but can be by fixed cost per server, by user, proportional to hardware resources needed, or a mix. To this, you must also factor in the cost needed to implement or extend any features in the long run. But there’s another issue that arises here: software like Python and R comes with limited capability to run 24/7 complex applications with high-availability, with multiple connections, and with high volume data. In addition, this isn’t always scalable so, when you grow, you’ll likely need brand new software that will send you back to square one.
4: Any Maintenance Costs Required to Keep It Up-to-Date For Any Future Needs
Finally, all software needs to be maintained to ensure optimum efficiency, but did you know that maintaining such software in-house is typically more expensive than paying a licence fee for an enterprise solution? More importantly, when a project or a company grows, the maintenance cost will grow too, especially if the software was badly coded to begin with.
Open-Source vs Enterprise Bespoke Financial Software: Our Verdict
What all this shows is that when it comes to financial software, saving money in the first few steps is nothing more than an illusion that comes back to haunt us in the long run.
So, while we may be somewhat biassed, our advice is genuine: choose the right financial software developers that know what they’re talking about and how to help you.
For example, we work on offering hybrid solutions that provide flexibility and scalability. This is thanks to our expertise in both finances and technology, but also thanks to our partners’ tools that include TIBCO® Streaming Event Stream Processing software. We use this in the Wakett Framework and it allows us to run Python, R, and many other codes, so you can take advantage of the whole shebang.
So, what are you waiting for? Get in touch with us to explore how we can create tailor-made software that suits your needs and is still cost-effective!