What is a Turnkey Solution?
A turnkey solution is a type of system built end-to-end for a customer that can be easily implemented into a current business process. It is immediately ready to use upon implementation and is designed to fulfill a certain process such as manufacturing (in part or whole), billing, website design, training, or content management.
A turnkey solution system is different than a custom-built or designed system. When a company or business isn't looking for multiple bells and whistles, a turnkey solution may be an affordable and simple option.
In a turnkey solution, a corporate buyer just has to "turn" a "key" to commence a business activity in the newly built structure. "Solution" evolved in the turnkey concept aseconomiesbecame more service-based.
Key Takeaways
- Turnkeyis a word that can be used to describe a solution, a business, or a property.
- A turnkey solution is the opposite of a custom-built solution.
- Turnkey solutions are created to be implemented into a current business process without disruption.
- Turnkey solutions can save a company time and money when implemented with success.
A possible drawback of this method, as opposed to designing a process in-house or a custom-built system, is that specifications that are important to a particular company may not be sufficiently integrated into the solution. In-house or custom-built versus turnkey decisions take the complexity of a business process into consideration.
With rapid advances in technology software and hardware, turnkey solutions are popular for businesses that desire speed to market.
Other Types of Turnkey Terms
Traditionally,turnkey, as a term, is commonly applied to construction projects, such as warehouses, other purpose-built buildings, or houses. The idea is that the building contractor finishes a product that the buyer can utilize immediately.
A turnkey property is usually a newly renovated and updated apartment building or home that is move-in ready for buyers or renters. Real estate companies, property sellers and buyers, and real estate investors often describe new buildings or homes as "turnkey" ready.
A turnkey business may refer to a business that can be purchased without having to make any changes to the business model or products sold. For example, a franchise like Taco Bell is a type of turnkey business.
Pros and Cons of Turnkey Solutions
A turnkey solution may be the most affordable way to construct something end-to-end that is beneficial to multiple users. However, turnkey solutions may not take into account the individual needs of a company. A turnkey solution for content management software offered by a third-party company may be cheaper to purchase, but it may not cover all the needs of the purchaser.
Example of a Turnkey Solution
A company looking to implement an online billing feature on its website can use third-party providers to process each transaction and handle all the technical issues surrounding this process. The use of a turnkey solution, in this case, allows the company to avoid the headaches of programming the tool in-house and the approvals associated with developing a billing system from scratch.
