The Build vs. Buy Dilemma
In many aspects of life, you are given a fundamental choice: to make something or pay someone else to do it. Do you build a new coffee table for the living room, or buy one? Make a casserole for the company potluck, or buy one at the grocery store? Make new friends, or buy them?
The same is true in business. For example, a company with ambitions to expand its product line can do so through internal research and development, buying another company, or licensing its technology.
Similarly, a company that wants to implement a software solution to a business problem must choose between buying and building one. Unless the company has an in-house software development team, this usually means: Do we buy a commercial off-the-shelf (COTS) solution or work with a software consultancy to build a custom solution from scratch?
The Dilemma
In most cases, this is not an easy choice.
Every business has unique problems they are trying to solve, and only in rare cases does a COTS solution meet all of the stated requirements.
In today’s business environment, mid-market companies are being forced by circumstances to achieve more with limited resources, and this often means implementing digital solutions to address issues such as:
- Differentiation in the marketplace—overcoming the competition with advanced technological capabilities.
- Controlling price inflation and ensuring a consistent, reliable supply chain
- Providing customers with an immersive experience that delights them while minimizing the strain on customer-facing teams.
- Dealing with a shortage of available talent (or available budget to attract and retain such talent)
- Sustaining growth in an uncertain macroeconomic environment
- Maximizing the productivity of a workforce that is increasingly home-based.
Meeting any of these challenges and the myriad others unique to each business requires a careful investment in technology. How do you determine what path will give you the greatest return on that investment?
It’s essential to choose carefully because any technology investment is risky, and many such investments fail to meet expectations. Consider:
- Almost half (49%) of organizations report that scope creep negatively impacted one or more of their recent projects; only 57% of projects finish within budget, and only 51% finish on time.
- Most (59%) businesses believe hiring skilled IT workers is difficult.
- Many companies find that digital initiatives fail to meet CEO expectations; 59% of these projects take too long to complete, and 52% take too long to realize value.
However, it’s also essential to keep in mind two important aspects of the “build vs. buy” dilemma:
- The choice determines what happens next, not what you get.
- There are more than two choices.
That second point is emphasized because it’s often overlooked. Companies want a simple, either-or choice, not realizing the value of exploring the in-betweens.
This Series
In this series of articles, we discuss the “build vs. buy” decision in detail: The questions to ask, the pros and cons of the build, buy, and hybrid approaches, and evaluation techniques that increase both the chance of success and the return on the investment.
How Solution Machine Can Help
For over 10 years, Solution Machine teams have been developing and delivering software solutions for businesses that operate across various industries, including manufacturing, retail, distribution, non-profits, media and entertainment, plumbing, heating and air conditioning contractors, and many others.
Contact us to see how Solution Machine allows your business to optimize business operations, increase employee and customer engagement, improve reporting and analytics for better decision-making, and give you a competitive advantage.