Software Development and Support Costs
Regarding Sara Lynn's comments, steps 2 and 3 are critical. Having been on both sides of the software biz (selling and buying), companies generally have a hard time with step 2. Requirements like "Must be easy to use" does absolutely nothing for qualifying a provider. First, its suggestive and second, what software company would not say their product is easy to use.
Sara's step 3 is also critical. I would go so far as to include the yearly maintenance cost into the project budget (and incorporate it into your ROI analysis). ROI's are a MUST. Companies don't buy software like they did before Y2K. Oh, one other thing: justify the project on hard dollars, particularly how it impacts management performance metrics (on-time ship, premium freight, warrantee $). Soft savings don't work anymore.
With respect to Big-3-Hand-Puppet's comment on 3rd party software: I just have to point to the automotive industry. After all GM doesn't make every part you find on that Corvette!
I would NOT recommend software that doesn't utilize standard software components and open standards. As for database, just ask your IT department how much it costs them to support their database installation. In fact many companies have standardized on their database back end as much as they've standardized on a common desktop.
Here's an example: at a major automotive supplier, the internal cost to support a single database (one of many within an installation) is $2000 per year. So being able to leverage IT resources across multiple db's is many times cheaper than staffing up to support an entirely new database installation (worst yet a proprietary one).
In close, I'll say this. When comparing the purchase of software vs. developing it yourself, keep in mind that the cost to support the application internally is 2-3 times greater because the costs cannot be spread out over multiple customers.