Build or Buy? — How You decide

Opinion is divided, often through bitter or sweet experiences. Changing trends, technologies and software offerings mean the pendulum can swing widely between both options.

Some companies I know approach system and tooling with a dogged determination to build from scratch. There are others I know, who wouldn’t contemplate building anything that is already available ‘off the shelf’.

So how do you navigate this debate? Should you define a set of principles that cements your beliefs or approach each capability requirement with an open mind?

Well firstly you’ll be sorry to hear there isn’t a silver bullet in this debate. It always depends on the company, its context and what capabilty they are looking to develop.

But there are some considerations that can help drive, debate and align on decisions. Some of the viewpoints below could be used to craft a set of principles that govern how you make build vs. buy decisions. More on that in a future blog post.

  1. We need a unique solution that isn’t on the market.

This is the biggest one. So many companies are keen to build out their own billing platform when there’s a menagerie of different vendors providing plug and play solutions. Many make the mistake of thinking vendors never change or have their own road map. I’ve heard many people give false impressions of what Oracle or Salesforce can achieve despite not visiting their website or witnessing a demo for over 10 years.

With this debate it comes down to how much customisation you need and what tradeoffs you’re willing to make. With so many clients, the likes of Oracle and Salesforce have introduced many more customisation opportunities.

But beware it’s important to think about the costs of customisation both in the short and long term. There will be additional development and test costs especially when upgrades are rolled out. Too many customisations can mean you would have been better off taking the build route.

2. We have scarce engineering resources.

Not everyone is Facebook with an army of engineers. For most companies engineering is an expensive and often constrained team. Many businesses make the mistake of building only to somehow forget about the need to maintain resources for on-going maintenance work. If you have a tight scope and the right experience then a build option is workable. The key is to ensure you don’t commit to something that soon becomes a noose once the solution is deployed.

3. Even if we buy there is a resource issue.

The debate here is about not forgetting that even buying something will require internal headcount to deliver and maintain. If you buy a Salesforce solution it will still require internal resources to handle integration work or penetration testing. The debate here can be solved by plotting out the resource ask required for build vs. buy. Remember to take the long term view to take into account upgrades and on-going maintenance. Doing this will allow you to make a more informed decision about which route to take.

4. Regulation requires us to use a recognised and accredited vendor.

This is a perfect example of context. Some companies will have to install a recognised solution to meet their obligations. Sometimes the decision is simply taken out of your hands.

So what’s our view? (Enough sitting on the fence)…

Well it does depend on the context but on the whole we’re big fans of making the ‘right decision’ vs. one we might like to make. We work with lots of clients with a strong engineering culture. That culture often means teams are delighted by the opportunity to build world class tooling and systems. With that culture comes the risk that constrained engineering resources get sucked up building things that aren’t their core focus. A retailer ends up building billing and payment systems when it should be focusing on it’s front end website or home delivery app. If your challenge is not unique and you’re happy with customisation and making trade offs then the buy option is our preferred route. Just remember that even buying will involve technical costs and resources.

At Strategy Activist we work with clients who sometimes build or buy or both. We exist to help those clients make the right decisions that protect resources and deliver value back to their business. To learn more about how we can help visit us at www.strategyactivist.com or call us on +44 7786063053.

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Work in travel tech. A fan of applying disruptive thinking to age old problems. Passions include writing, reading, ski touring and travel. Opinions are mine.

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Paul Roberts

Paul Roberts

Work in travel tech. A fan of applying disruptive thinking to age old problems. Passions include writing, reading, ski touring and travel. Opinions are mine.

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