Build vs. Buy
January 8, 2018
When you’ve been playing in the Enterprise space for nearly 20 years, you begin to identify certain trends and behavior patterns. Companies that reside in this world have certain advantages and other disadvantages compared to the SMB marketplace. Some are positive and some are predictable. For starters, these organizations typically have the financial, human and other resources necessary to tackle most tasks. They also have the arrogance to believe that there is no task too tall to conquer. This is the mindset that has allowed for their great success. However, on the downside, these organizations often have the bureaucracy that can turn an initiative that should last weeks or months into years.
We live in a vendor-centric society grounded in innovative thinking and development, where technology and subject matter expertise seems to rise from a potential need like a Phoenix from the ashes. Where there is a problem, there are usually multiple, qualified service providers with potential solutions. This creates a conundrum for today’s businesses, especially in the Enterprise world: “Should we Buy or should we Build?” Conventional wisdom tells us that most big business has the money, talent and resources to solve big problems. Their preference is to blaze their own trail with little to no reliance on outside entities, which creates a culture of Building. We’ve seen it repeatedly.
All we’ll say is, “Not so fast.”
So, to Build or to Buy?
As a Software as a Service (SaaS) serving some of the most recognizable names domestically and globally for decades, where big budgets and large pools of resources are the norm, we’ve seen our fair share of current and former clients that have elected to Build rather than Buy. What we’ve also witnessed is the graveyard of failed projects, wasted time, many millions of dollars burned and CEOs, CTOs, CIOs, CCOs and CFOs scratching their heads and asking themselves, “What now?”
Here are five considerations when contemplating Build vs. Buy:
- Stay in Your Lane – Be introspective enough to know what you know and what you do not. Building means you must acquire and sustain the expertise needed to support the technology; you now must become the expert and own every facet of the technology and what drives it. You cannot just set it and forget with technology, the engine that drives it and the platform it resides on.
- Penny-Wise, Dollar-Foolish – What is this thing really going to cost? The true cost of development and ownership—including ongoing support, maintenance and infrastructure—is rarely fully understood up front. Time after time, companies enter a project with no real grasp for day 1 or future costs. Often, the cost to build and maintain a solution is 2x, 3x, or even 5x what was projected.
- One and Done? – Unfortunately, this isn’t the NBA draft. Enhancements are on you. Support, maintenance and infrastructure are just part of the future state. Needs and workflow change. Businesses become savvier and more demanding, and the first iteration is rarely, if ever, the last. Ask yourself if you not only have the horses to Build an application to meet your business needs, but the horses to support it. Applications, hardware and software and connectivity, to name a few, must continually be upgraded.
- If You Build It, It Will “Break” – Will you know where to turn if something stops working or isn’t functioning as expected? Trouble resolution, like product enhancements, are on you. Most companies prefer one entity to call and one throat to choke if and when issues inevitably surface. They do not want or have the bandwidth for a wild goose chase to troubleshoot, identify an issue and work towards a resolution. The inability to expeditiously resolve any hiccups with the technology typically means lost money and production.
- Stepping on Someone Else’s Toes? – Are you positive that someone else doesn’t own some or all components of the technology you are building? Intellectual property should always be a consideration. When you set off to develop and deploy a solution, be certain that the solution/process doesn’t reside in someone’s patent portfolio. Companies work hard to innovate and stay ahead of the technology curve, and work equally as diligently to protect their IP.
The reality is that there are closer to 500 considerations than five, but, hopefully, you get the point.
The Right Decision for Your Business
Don’t allow well-intentioned technology and other teams to take you down a long road leading to nowhere. It may mean a project could last years, and provide job security for them, but where does it leave your business?
There are qualified, specialized vendor partners out there that have already built what you need and have the know-how to support and enhance it as needed. This is especially true with niche services like marketing compliance where there is a proverbial TCPA and Do-Not-Call “landmine” (regulation) at every turn; not to mention a potential hit against your wallet or a mark against the brand you have worked so tirelessly to create and maintain. It is a moving target, and you either move with it or ultimately pay the price.
Buying may force companies to relinquish some control, but this is not a bad thing.
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