The same question arises again and again when it comes to acquiring a new tool to simplify your teams' day-to-day work. Is it better to build it yourself, or use an existing solution on the market?
The prospect of building the tool in-house by mobilizing your IT teams may seem attractive at first glance. But who hasn't dreamed of the perfect tool? The one that ticks every box in your specifications.
But did you remember to fill in all the boxes? Are these specifications still up to date now that you have the tool in hand? Who will update it? Do you have the necessary budget? Does the IT team have sufficient bandwidth? And the necessary business expertise?
This question is coming to the fore again as companies' carbon reporting becomes increasingly complex. Your CSR and CFO teams are facing a drastic increase in the requirements of the various existing reporting standards , which are no longer geared towards a simple compilation of data, but rather towards the implementation of decarbonization strategies with fixed deadlines.
In the past, you could rely on a "simple" Excel file to condense all your carbon data, but today this is impossible. Data collection is becoming increasingly complex, in terms of frequency, quantity and processing. If you're not properly equipped to carry out this annual exercise, you run the risk of becoming a Sisyphean task.
So this new carbon accounting tool, is it better to develop it yourself or use an editor?
Keep an eye on your timeline
The first question that arises is that of timing. Are you ready to embark on a project to build a carbon accounting software package, taking into account not only the time it will take, but also that of the teams that will be mobilized for the project?
To build a tool from scratch, you first need to clearly express your needs, draw up an exhaustive specification and match the requirements contained in this document with the time that IT teams can allocate to the project.
While some simple tools can be created in just a few weeks (we're talking about the famous Excel file), a more complete tool will inevitably require months of development, iterations, tests, adjustments... before you can actually use it.
The fact is, carbon accounting is becoming increasingly complex. New, increasingly stringent international standards and regulations require ever more comprehensive data covering your entire value chain. Data quality, format and processing methods are also highly variable: physical data VS monetary data, quantitative and qualitative data, management of emission factors, uncertainty rates...
This trend de facto renders the Excel spreadsheet obsolete, however sophisticated it may be. You'll have to bet on an evolving tool with much more advanced functionalities.
Assume that its development will take many months, and will continue according to the availability of your IT teams, for whom your tool will not necessarily be a priority.
Conversely, a SaaS tool will be available on a turnkey basis.
Arbitrate on costs
The other key issue is, of course, cost.
Carbon accounting tools have variable costs. For software dealing with the physical data required to meet the main international standards and regulations, a minimum annual budget of €10k is needed for a company with relatively simple operations and organization. For software handling ESG indicators in their entirety, essential in the context of CSRD, an additional budget of the same order of magnitude will be required. Depending on your budget, these costs may appear high and justify the development of your own solution.
However, we're not telling you anything new when we say that developing an in-house tool also has a cost: the cost of the man-time you and the many other people involved will spend on the tool, hosting costs, maintenance costs...
Unlike a SaaS tool, whose cost is transparent and predictable, the cost of your project is difficult to estimate and can quickly go off the rails.
Your cost analysis will inevitably have to take into account the return on investment expected from your tool, whether purchased or developed in-house. However, the only way to calculate it is to be able to make a correct estimate of its initial and future cost.
For example, our estimates on the use of Traace for carbon accounting show an average ROI ranging from 150% to 400%, depending on the depth of measurement of the company's carbon footprint, making the investment in the tool de facto profitable.
Evaluate the level of experience required
The first benefit of a tool developed in-house is that it will be able to respond perfectly to all your requests, even the most precise, even the wildest.
Conversely, a SaaS tool will generally be designed and built to meet the needs of the greatest number of people. Customization will be less extensive, so it won't necessarily meet all your requirements.
However, by depriving yourself of a Saas tool, you are also depriving yourself of 2 things:
- the carbon accounting experience of those who built the tool
- continuous improvements based on feedback from the community using the tool
Your IT team, no matter how talented, is unlikely to have a clear and exhaustive vision of the issues raised by carbon accounting. Their added value lies in the response they can provide to your requirements, and this calls for a very complete set of specifications. However, these specifications will have been drawn up at a given moment, and your expertise alone will not allow you to imagine all the potential future evolutions of the tool, driven by the regulatory framework, the extension of your carbon analyses or the development of your company.
The result can be a tool that lacks flexibility and is difficult to maintain over the long term. Added to this is the risk that the software may not comply with regulatory reporting requirements.
On the other hand, the Saas tool will be supported by a team familiar with carbon accounting issues . It will be able to build the tool in a much more flexible and scalable way, anticipating regulatory changes and helping you to scale up in an extremely reactive way, based on pre-existing elements of its tool.
The contributions made by the many users of the solution will not only enable continuous improvement, but also the development of new features that you might not have thought of at first, but which could prove to be very useful.
Last but not least, relying on a team of experts also means benefiting from support in setting up, deploying and managing your carbon strategy from teams with a global vision of the market. Confronted with numerous sector-specific issues, they have been able to develop an expertise that will be useful to you when it comes to correctly analyzing your carbon footprint and identifying the most relevant levers for reducing your emissions.
It's this global vision, and the responses we've given to our users' needs, that has enabled Traace to provide a whole range of functionalities that go far beyond a simple data collection tool. For example, you'll find dashboards to simplify your analysis, tools to model your actions to reduce GHG emissions, financial projections and a module to evaluate your supply chain.
Estimate the service life of your tool
When you decide to develop ESG software in-house, you need to bear in mind that, like any other software, it will require regular updates and maintenance.
These interventions are sometimes technical (security, obsolete technologies, etc.), sometimes operational (changing needs, changing regulatory framework, etc.).
This criterion is all the more important as the subject of carbon accounting is extremely fluid. The regulatory framework is evolving rapidly, as are the related international standards.
To be able to properly analyze and act on your carbon footprint, you'll need to ensure, for example, that your emissions factor databases are up to date.
To make your decision, you'll need to analyze these operations from the point of view of the cost they represent and the bandwidth they require, from both the CSR and IT teams.
When you choose turnkey software, you benefit from the updates and maintenance operations that are an integral part of the software teams' roadmap. Unless there are major evolutions, these operations are generally included in the base price of the tool, and are carried out on an ongoing basis, without the need for specific requests.
The concern you may have is about the security of the tool. It contains your company's key data, and it's only natural to be concerned about how this data is handled, and whether the software is secure enough to prevent any leaks. If you opt for a SaaS tool, it's essential that you take a close look at their security and data management policies.
An alternative: buy and make it?
Develop or buy, as is often the case, the best alternative may lie somewhere in the middle.
Developing in-house means you'll have the tool that meets your needs exactly, without compromise or superfluity. On the other hand, you will have to take into account the substantial costs involved, the availability of the teams involved and the potential lack of flexibility of your tool.
On the other hand, Saas software gives you clear pricing, a scalable product and a development team with expertise in carbon accounting, better able to understand and formalize your needs. On the other hand, you'll need to make sure that the carbon accounting platform is secure and capable of supporting your development.
An alternative solution is "buy and make it". A turnkey carbon accounting solution, developed by experts in the field BUT highly customizable. The software would enable you to build your own data collection flows, work in collaborative mode, customize your analyses and action levers, create your own dashboards...
The software provides you with all the tools you need to carry out your missions, but leaves you in charge of implementing your carbon strategy. In this way, the "buy and make it " solution acts as a facilitator.
No need to call on your in-house IT team, you'll be able to apply the requirements of your specifications yourself in a simple, intuitive way at the heart of the tool.
It was with this philosophy in mind that we developed Traace. Our aim is to provide you with a modular tool, which will enable you not only to adapt your carbon accounting to your company's inherent specificities, but also to evolve the tool in line with your company's development and/or carbon strategy. Co-development opportunities will enable you to take this approach even further, depending on the additional needs you identify.
