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.
BREAKING DOWN Turnkey Solution
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 corporate buyer just has to "turn" a "key" to commence a business activity in the newly built structure. In the case of a house, the home buyer turns a key and moves in.
"Solution" evolved in the turnkey concept as economies became more service-based. With rapid advances in technology software and hardware, turnkey solutions are popular for businesses that desire speed to market. A possible drawback of this method, as opposed to designing a process in-house, is that specifications that are important to the particular company may not be sufficiently integrated into the solution. In-house versus turnkey decisions take the complexity of a business process into consideration.
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.