Article

Should you develop your own currency management software?

Before deciding on DIY development, consider the functionality gap between in-house solutions and state-of-the-art software available off the shelf.

July 24, 2014

by Brendan Burge
Regional Sales Manager, Toshiba Banknote Solutions Group

I recently had an opportunity to speak with a vault manager whom I have known for the past nine years. We had an interesting discussion about the advancement of technology in his vault and, most particularly, with respect to vault management software. The story I heard was so surprising that it made me wonder if developing proprietary currency software is a good idea or a bad one.

First, a little personal history. Anyone who has followed the website Counting On Currency for more than the past two years will have realized that I am do-it-yourself amateur with an abundance of passion and limited Web-development skills. For the first five years of its existence, I was the sole architect of the entire website.

Two years ago I realized that if I wanted to present readers with a credible resource, I would need to hire a professional web-developer. The result of that investment is what you see today when you visit Counting On Currency.

That said, let’s get back to the story of the results from developing your own currency software: My friend told me that after looking at all the off-the-shelf vault management software solutions and weighing benefits vs. cost, he found that developing his own currency software was a much less expensive proposition than buying off the shelf, and that the project would result in customized functionality suited to specific requirements.

After seven years of continuous development his organization had implemented a basic solution that allows for simple deposit processing, cash-in and cash-out transfers, and vault inventory reporting.

When I asked about features like customer order integration (via telephone or Web portal), currency sorter integration, desktop counter integration, counterfeit reporting, receiving and shipping controls, customer account memo posting, and other more advanced functionalities, I was told that these were still being developed — after seven years of continuous effort!

Apparently management still believes that developing currency software in-house is still a more cost-effective solution.

I will admit that in mature markets such as North America and Western Europe, examples of developing one's own currency software are becoming more rare. In less mature markets, it is still considered that developing your own currency software is a better way to build a currency vault operation.

Perhaps the obvious cost vs. benefit analysis might show that, with the low cost of software development available in some countries, this is the best way to proceed.

I would challenge this assumption by questioning the cost of the functionality gap between in-house developed solutions and state-of-the-art, world-class solutions available off the shelf.

Although I am not writing this article to promote any particular vendor’s solution, I can say from my own experience that I have never met a vault manager who lived with an in-house solution and was happy with it in the long run.

A few of the less obvious risks that were realized by my friend during his organization's seven-year development cycle included:

• outdated development tools that ultimately required starting certain projects over again;
• software developer turnover that resulted in lost intellectual property and redundant effort;
• poor version control methodology resulting in failed revision rollouts with less than appropriate quality assurance testing;
• legislation and central bank policy infractions; and perhaps the most important shortfall,
• customer dissatisfaction.

In this age of advanced software development tools, industry-specific vendor research and development, and the declining cost of software development in general, I would suggest that purchasing an off-the-shelf currency management solution, paying for required custom functionality and investing in annual support and enhancement services is far less expensive than developing a solution from scratch.

In addition, the exponentially rapid advancement of software and hardware technologies requires a consistent and substantial investment to retain best-of-breed status. However, this is something few banks want to invest in since software development is not a core competency.

So I ask you, do you really and truly believe that developing your own currency software is the best long-term solution?

Image courtesy stuart miles | freedigitalphotos.net