Why staffing agencies shouldn’t build their own technology

Here’s what happens when staffing agencies build their own databases:

1.  Agency decides that their particular requirements are unique and require a bespoke solution.

2. Agency sources and shortlists 3 web design companies and briefs them on their needs.

3. Web design companies conduct a brainstorm with the project team from the agency.  The brainstorm brings up the macro problems and highlights some obvious efficiency gains but it fails to address numerous opportunities that are only learnt through trial and error.

4. Three quotes are received, reviewed and one agency chosen.  A further brainstorm wrings out a few more opportunities and the build commences.

5.  Gradually, the product takes shape, each development bringing new opportunities and questions, each with their price.

6. Product is deployed.  £10 – £35k spent.

7. Agency starts using it and creates a list of ‘nice to haves’ that got missed out in the brainstorm.  Average nice to have is anywhere between £500 and £2000.  Agency spends approximately £6-£8k per year, excluding hosting to try and turn the original build in to something that really nails the problem rather than 70% of it.

8. Two years later, the agency has spent another £16k or so on top of the initial outlay and the product is two years old, two years out of date.

9.  Finally, security.  Features are added when money is available, but bugs happen all the time and security bugs will appear in the custom code or the libraries and services used by the application and without a team constantly looking into the app and the infrastructure, constantly updating it, keeping track of new releases and security advisories, the system will become vulnerable to attack. And it doesn’t take a targeted attack to take it down, there are computer programs scanning automatically for systems with vulnerabilities to take them over and generally use them to send spam or do phishing attacks.

But the technology is proprietary so surely this adds value to the business?  Simple answer, not really.  In fact, if the business gets bought, the clunky old software might be one of the first things that gets reviewed and the whole process starts again.

Don’t build your own technology, it’s a false economy.  Your problems are often not unique.  Find the very best cloud hosted application for that particular need, review their pricing model (often a low monthly cost) and sign up for a trial.  They usually don’t have contract restrictions so you can jump on and off with little hassle.  Every month, their product will get better, your price will stay the same, and your company will be run on an up to date, ever evolving, super product from now on in.

Some applications you might want to check out:

CRM – www.highrisehq.com

Project Management – www.basecamp.com

Task Management – www.asana.com

Staffing Database – www.watu.wpengine.com

Easy Newsletters – www.mailchimp.com

* The article above is based on the experience of three different promotional staffing agency founders, two who have tried to sell their businesses.

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