Strategic Services

Build or Buy?

When does it make sense build a custom program vs. buy an off-the-shelf product?

Sometimes the decision is simple enough: Building is the only option if what you do is so specialized that no one is commercially marketing a potential solution. Building also makes sense if you already have custom systems in place and a custom program can be developed more quickly than attempting to integrate an off-the-shelf product.

Buying makes sense if quality applications are available that can meet all or most of your needs. Most organizations do many of the same things similarly and only a few things uniquely. If an off-the-shelf product offers most of what you need and would only require a few alterations/additions to get the job done, it should be considered. Obviously (as discussed on the Package Selection page) packages need to be carefully evaluated to determine their suitability.

Even if you find an off-the-shelf product that can work: What are the costs associated with licensing and maintaining the product over the next several years? How about maintaining the product: Can you maintain the product in-house? Will you need training, new staff, or outside vendors? In other words, what is the total price of that off-the-shelf software?

Who Calls The Shots?

Another issue that needs to be considered regarding off-the-shelf products is their functional flexibility. Will the product accommodate the way you do business or will it force you to change procedures, staffing, etc., to accommodate it? And if it does, is that a good or bad thing? Generally speaking: when a product dictates procedure, it is less likely to gain staff acceptance. As training requirements increase, so does overall disruption. On the other hand, sometimes a company will benefit by upgrading to a "best practices" approach. Is it time to take a look at how things are being done and see if there are better ways?

When Is "Old But Good" Just Old?

Meanwhile, let's say your first instinct is to custom program a solution because your other systems are custom and/or proprietary, and it doesn't seem to make sense to bring in a 3rd party application and go through the gyrations necessary to make it work. Fair enough. But eventually the question gets entangled with other questions: Are you running on outdated technology? Do you run the risk of not being able to find internal or external support for your systems because people are moving on to new programming languages / environments / operating systems? Is this particular Build vs. Buy decision the tipping point that indicates it's time to upgrade everything? Or is it time to start migrating gradually towards an up-to-date set of systems, or adopt systems that do new things such as web-related applications? It absolutely makes sense to leverage whatever previous investments have been made in technology for as long as possible. But, particularly in the world of Information Technology, change is inevitable and can only be held off for so long.

In-House vs. Outsourced

The Build vs. Buy decision should never rest solely on whether something can be done in-house (whether custom programming or application implementation) or has to be "outsourced." Because an in-house team can handle something doesn't automatically mean that it should. In additional to all of the previously discussed issues, the financial and opportunity costs associated with utilizing an in-house team should also be considered when deciding between in-house, outsource, or a combination of the two. In the end that may, indeed be the best choice but it should not be assumed to be. And don't forget to consider all the options: maybe your team manages the project but uses contract staff to provide skills not available in-house, for instance.

In conclusion, the Build vs. Buy decision should rest on a comprehensive analysis of all the issues and their short and long-term associated costs.

For more information, call us at 216-524-9055 or send us an email.