Building finance software integrations in-house is kind of like that scene in National Lampoon's Christmas Vacation where Clark decorates his home with an extreme number of lights. Think about how long it takes him to cover every square inch of his home with gobs of cords connected to who knows where.
Even with dedication at heart, Clark realizes he missed a cord or two somewhere in the process. Why isn't it working? Maybe an expert was needed for a big project like this one.
With a little help from an outsourced expert (his wife, Ellen) and some Christmas spirit, the lights are miraculously working! Look who has the brightest house in the neighborhood now.
In 2024, a growing number of small to medium-sized businesses are choosing to digitize outdated finance operations, including the use of AI and automation strategies.
Software integrations, in particular, have been widely used by enterprise businesses for decades, but now with more availability of cloud software solutions, small teams can take part in the action.
Due to the number of repetitive tasks, finance and accounting operations are usually the focus of most digital transformations. Finance automation decreases the number of human errors, speeds up processes, improves decision-making, and keeps businesses in compliance.
To take advantage of the power of integrated finance technology, organizations must decide if they're going to take a DIY approach to building integrations or outsource the work instead.
Before calling on your IT team to build integrations in-house, let's take a look at what goes into a project's success and ongoing considerations
What to expect when building finance software integrations in-house
1. Initial & Ongoing Time Investments
There are two timelines of an integration project where you'll need dedicated internal resources:
- The initial build of the integration
- Continuous maintenance and support
The initial build of software integrations can vary depending on the number of applications involved, data complexity, and different methods used to execute the solution.
Most SaaS applications have standard connectors that can be quickly implemented in just a few weeks, but the features are often restricted to the most common industry use cases. Due to their inflexibility, pre-built integrations can be difficult to scale when operations and technology infrastructure changes.
On the other hand, custom integrations can take up to several months to design, develop, and test. If the integration requires custom code and substantial data mapping, internal development teams will need to extend the project's timeline to ensure the solution aligns with business objectives.
Most technology projects are completed in phases, requiring varied expertise throughout the process. Someone will need access to a software's API (application programming interface) and plan accordingly for internal resources required for ongoing maintenance of the integration. Throughout the build, IT teams and departments impacted by the updates will need to undergo thorough testing and training.
2. Opportunity Costs
If you've ever worked with someone in IT, then you know how good they are at solving problems. They're often skilled in multiple areas of technology throughout the organization. When integration needs arise, internal IT teams lose focus on their primary roles—often adding to their project backlog. Even if in-house developers are capable of building integrations, it doesn't always mean they should.
When internal IT resources are spread thin, outsourced integration development provides…
- Cost expectancy for the initial build and ongoing services
- Faster implementation with pre-built solutions and tools
- Access to dedicated experts in software integration
- Flexibility to change or update solutions at scale
- Ongoing support and monitoring of API usage, software updates, etc.
- More time for your team to focus on what they're best at
3. Scalability Requirements
As an organization grows, changes in people, processes, and technology will happen. Inevitably, software integrations will need updates to align with new business objectives. The level of difficulty for making adjustments to integrations depends on the method used to build them and the resources dedicated to servicing them.
As a fully outsourced integration provider, at least 30% of Venn Technology's clients require a yearly service plan for updates to their integrations. For context, we help many finance and accounting teams who have in-house IT specialists. When errors and requirement changes occur, a consultative approach plus a technical solution is needed—often pulling IT teams away from other strategic initiatives.
Our support requests contain simple to complex requirements, often arising from…
- Operational changes (ex: A workflow in Salesforce needs to be updated so teams no longer have to update customer data manually)
- Technology changes (ex: A shoe business adopts Shopify for improved e-commerce management with its cloud accounting solution)
- People changes (ex: A nonprofit organization moves to an in-house accounting structure, assigning new team members and changing the structure of automated workflows for its donor and grant programs)
4. Security and Compliance Maintenance
Error-handling mechanics are a must for software integrations—especially in finance and accounting operations where data accuracy is crucial.
Internal teams must remain informed on the latest software updates, API changes, and industry standards to ensure the organization avoids vulnerabilities and compliance issues.
Leveraging automation is a way to limit human error and increase efficiency, but such solutions will require designated experts to monitor their status and use comprehensive debugging techniques when needed.
5. Knowledge Silos
Integrating business apps requires specific, high-level expertise. Many IT professionals specialize in a variety of areas, but it is rare to find someone with long-term experience in software integration alone.
If you do hire developers dedicated to internal integrations, they ultimately hold the keys to the kingdom—meaning, they'll need thorough documentation to train internal teams and future recruits.
On the other hand, outsourced providers who solely specialize in software integrations will have ready-to-go resources and pre-built connectors to speed up the implementation process. Most service providers will have dedicated account managers and integration consultants who support integration needs for your team. This means less pressure on your IT team, freeing them to focus on more value-added projects.
6. Infrastructure costs (Licenses and API usage)
Several infrastructure costs come with building integrations in-house.
Including ongoing platform subscriptions and user licenses, in-house software integrations include:
- Full-time developers
- Middleware or iPaaS platform fees
- API usage & Web services costs
- Cloud storage fees
When considering building software integrations in-house, it's important to calculate all long-term support costs. Depending on how your complex needs are and the resources available internally, the cost to outsource integrations could be the most cost-effective option for your team.
In Conclusion: Finance leaders and IT specialists should conduct a cost-benefit analysis before choosing to build in-house software integrations
Considering the initial implementation costs, ongoing expenses, and potential risks of expending internal resources, it's highly recommended that businesses explore an outsourced approach to integrating and automating internal tech stacks. A hybrid approach is also an option—combining internal resources with external expertise.
To learn more about outsourced integrations, check out this article and other resources on our blog.
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In case you're reading this in December, we hope you have a Merry Christmas and Happy Holidays! Now, go enjoy a hot chocolate and movie marathon with the Griswolds :)
