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Recently, I heard of a prospective customer considering the notion of building their own AP automation solution. As a vendor, I found it remarkable that one would consider such an undertaking, especially with the many suitable options available in the market. I was sufficiently intrigued by the notion that I decided to do a cost comparison of build vs buy and see if my preconceived notion held up [Spoiler Alert: it does hold up, and dramatically at that].
Development Cost
I checked with our Director of Engineering and we have north of 20,000 hours invested in the development of AP Express for one platform. That equates to 2,000 person days. Looked at another way, it would take a team of 10 developers 1 year working full time to build an equivalent system.
According to salary.com, the average Software Developer Level II salary in the United States $87,390 as of June, 2021. The investment in salaries and benefits comes to $879,143.
That’s just the cost of development. It does not include the cost of 3rd party software programs (database, OCR engine, security, development tools, etc.). Nor does it include the hardware costs associated with hosting, storage, system backup, etc. Let’s assume they amount to an additional 15% per year on top of the development cost.
Development Cost
Developers
$873,900
Software/ Hardware
$131,085
Total
$1,004,985
Ongoing Cost
Year 2
Year 3
Developers
$90,012
$131,085
Software/ Hardware
$92,712
$131,085
Total
$95,493
$131,085
Ongoing Cost
Year 2
Year 3
Year 4
Developers
$90,012
$92,712
$95,493
Software/ Hardware
$131,085
$131,085
$131,085
Ongoing Cost
Year 2
Year 3
Year 4
Year 5
Developers
$90,012
$92,712
$95,493
$98,358
Software/ Hardware
$131,085
$131,085
$131,085
$131,085
Ongoing Cost
Year 2
Year 3
Year 4
Year 5
Total
Developers
$90,012
$92,712
$95,493
$98,358
$376,575
Software/ Hardware
$131,085
$131,085
$131,085
$131,085
$524,340
Total
$221,097
$223,797
$226,578
$229,443
$900,915
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