Contractor management software: Build or buy?

Managing contractors is essential for businesses today, especially as remote work becomes the new normal. But if your company is scaling, you'll quickly realize that managing a growing number of contractors manually is unsustainable with spreadsheets and emails. This is where a contractor management software (CMS) becomes crucial. An efficient system can help you manage your freelance contractors more effectively, improve collaboration, and keep projects on track. 

The big question: should you build one in-house or buy an existing solution?

Both options have pros and cons, but the choice ultimately depends on your company's needs, resources, and long-term strategy. In this article, we'll explore the key considerations for building vs. buying a CMS and why investing in an established system like Remote’s contractor management software, is often the smarter decision.

The complexity of building a contractor management software

At first glance, building your own CMS might seem attractive. You’d get full control over the system, the ability to customize it to fit your unique processes, and the potential to avoid paying long-term subscription fees. However, the complexity of building a robust system often gets underestimated.

High initial development costs

Creating a CMS from scratch is a massive undertaking. It requires a development team, time, and resources to get up and running. You need to consider hiring developers (if you don’t already have a tech team), project managers, testers, and possibly even outside consultants to ensure compliance with labor laws in different regions.

In addition to personnel, think about the technical infrastructure you'll need. Contractor management isn't just about storing contact information‌ — ‌it involves tracking payments, tax forms, compliance documentation, and project timelines, all while ensuring your system is secure and scalable. Building all these features can cost tens of thousands of dollars upfront‌ — ‌and that's before you consider ongoing maintenance costs.

Ongoing maintenance and upgrades

Once the system is built, the work doesn’t stop. Regular maintenance is essential to ensure that the system remains functional and up to date. Compliance regulations often change, especially if you manage contractors globally. Your system will need constant updates to reflect these changes‌ — ‌whether it's ensuring GDPR compliance in Europe, adhering to labor laws in the U.S., or meeting tax filing standards in multiple countries.

If you don’t have a team dedicated to keeping the system updated, you’re risking compliance penalties, security vulnerabilities, and a breakdown in managing contractor relationships.

Risk of delays and bugs

Building custom software is rarely quick. What might seem like a three-month project can quickly stretch to six months or longer due to unforeseen bugs, changes in scope, or staffing challenges. These delays can leave you without a system when you need it most, especially as your contractor network expands.

The advantages of buying a contractor management software

On the other hand, buying contractor management software like Remote allows you to skip the development process and start managing contractors more efficiently right away. Here’s why buying, especially from a solution like Remote, can save you time, money, and stress.

Fast implementation and scalability

With a purchased CMS, you can have the system up and running in a matter of days, not months. This means your company can immediately improve contractor management processes without the long wait time associated with building a custom system.

Moreover, pre-built systems like Remote’s are designed to scale with your business. Whether you’re managing 10 contractors or 1,000, the system can accommodate your needs with minimal effort on your part. This level of scalability is hard to achieve with a custom-built system, which often requires significant reconfiguring and additional development as your contractor base grows.

Compliance made simple

One of the biggest headaches in contractor management is ensuring that you’re compliant with local and international labor laws. Failure to comply can lead to expensive fines and legal trouble.

A trusted solution like Remote stays on top of global compliance regulations for you. From contractor classification (to avoid costly misclassifications) to tax filings, a pre-built CMS handles compliance automatically, helping you avoid costly mistakes. Remote’s system is designed to handle multi-country tax regulations, ensuring your contractors are paid correctly and all necessary paperwork is filed according to local laws.

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Cost-effective in the long run

While building a CMS might seem cheaper at first, the long-term costs can quickly add up. Maintenance, compliance updates, and scaling issues can drain your resources. When you buy a system, these responsibilities fall on the provider, not your internal team.

For example, Remote offers transparent pricing with no hidden costs, giving you predictable expenses month after month. You won’t need to worry about unexpected development bills or compliance fines down the road.

Dedicated support and security

Pre-built systems often come with dedicated customer support to help you troubleshoot issues or get the most out of your system. If you build a CMS in-house, solving problems is your responsibility, which means allocating resources toward ongoing troubleshooting and support.

Additionally, established CMS providers like Remote prioritize data security. Contractor information, payment details, and tax forms are sensitive, and ensuring this data is secure is no small feat. A professional CMS is built with robust security protocols in place, ensuring your contractor data is protected.

Build or buy ‌contractor management software: Factors to consider

When deciding between building and buying contractor management software, there are a few key factors to keep in mind. These include:

The size of your team. The number of contractors you manage is a big factor in your decision. Smaller teams might find that pre-built solutions work just fine, while larger teams will likely need more robust, customizable systems. Keep in mind the current and projected size of your freelance workforce when making your choice.

Budget. Cost is a critical consideration for most businesses. Building a custom system can be pricey, particularly if you need specialized features or integrations. On the flip side, pre-built solutions may present cost-effective options with different feature sets. Weigh your budget and decide if the investment in a custom system aligns with the long-term benefits.

Skillset of your team. Evaluate the technical prowess of your in-house team. Building a bespoke contractor management software demands coding acumen and continuous upkeep. If these skills or resources are not at your disposal, a pre-existing solution might be the wiser choice. Weigh the time and energy needed to construct and sustain a custom system against the expense of procuring an off-the-shelf platform.

Importance of customization. Consider the level of customization you require. If your business has unique processes or workflows, a custom system can be tailored to your specific needs. However, if standard features meet your requirements, a pre-built solution may suffice. Evaluate the trade-off between the flexibility of a custom system and the convenience of an off-the-shelf product.

Your data security requirements. Data security is non-negotiable, especially when sensitive client or project information is in play. Evaluate the security features of both custom and pre-built systems. Look into data encryption, access control, and adherence to industry regulations. Your solution must be in lockstep with your organization's data security policies and standards.

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Cost comparison: Build versus buy

When assessing the costs of building contractor management software from the ground up versus procuring a pre-made solution, some considerations should be taken into account.

Initial investment

To build a custom system, you'll need to invest upfront in development costs. This includes hiring skilled software engineers, project managers, and quality assurance personnel. You'll also need to factor in the hardware and software infrastructure needed to support the system. On the other hand, purchasing a pre-built solution involves a one-time license fee, which can be more cost-effective for businesses with limited budgets.

Long-term maintenance costs

Custom solutions need constant care to keep them running smoothly and to address any problems that pop up. This includes regular software updates, bug fixes, and security patches. Over time, these costs can add up and may even surpass the initial investment. Pre-built solutions often include maintenance and support services in their licensing agreements, so you can be sure your system will stay up-to-date and functional.

Licensing fees

Pre-built systems often require licensing fees, which grant you the right to use the software. These fees may be one-time or recurring, and the cost can vary depending on the specific solution and the number of users. Custom-built systems do not have licensing fees, but the initial development costs may be higher.

Return on investment

The return on investment (ROI) of a freelancer management system is a key factor to consider when deciding whether to build or buy. Custom systems offer the advantage of flexibility and customization, boosting long-term productivity and efficiency. However, the ROI may take time to materialize due to the initial higher investment. Pre-built solutions, on the other hand, may yield a quicker ROI, as they can be implemented faster and require less customization.

By meticulously assessing these cost factors, you can confidently decide whether to build or buy a contractor management system that fits your budget and future objectives.

Why buying a contractor management system is the smart choice

While building a CMS might offer full control and customization, the hidden costs, time commitment, and risks often outweigh the benefits. 

Buying a pre-built solution like Remote Contractor Management offers immediate benefits, from fast implementation to effortless compliance, predictable pricing, and built-in security. It eliminates the headaches of development, compliance, and maintenance while allowing your business to focus on its core strengths.

Remote handles the complexities of contractor management so that your team can focus on what really matters‌ — ‌growing your business. Instead of spending valuable resources on software development, you can invest that time and money in expanding your operations, improving client relationships, and fostering innovation.

Ready to simplify your contractor management? Explore how Remote’s contractor management software can help you hire international contractors easily and scale your business globally. 

Download our helpful guide or contact us to book a demo today! 

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