As companies are looking at transforming towards digital solutions to make them more Impactful in their line of business there is an extremely critical issue every top management has “Should we BUILD or BUY?”
In this paper we will discuss the decision-making criteria's that we should consider for Build vs Buy.
Let us First Clear the air
From a digital perspective Building a product (inhouse or customer facing) there are things we need to consider from talent, infrastructure, security, availability, and maintenance. Everything on that list is Cost.
Buy does not necessarily mean taking a SAAS solution and using it involving customizations, altering business processes, change management, integrations, and dependencies. It can extend to buying the Product solution to increase synergies and make that product make money or meet the organization's vision. We will in this paper not get into details of Buying the Product focus on using the capabilities such a product provides.
Pros and Cons of BUILD
Building in-house products seems to cost less than purchasing an off-the-shelf product. But this can be challenged with the subscription model many of the SAAS platform provides. But one can focus on the low hanging fruits and get substantial value for money quickly if planned well. The digital solution can be extremely focused and tailored to the specific need to bring out high business value. This also becomes the top competitive advantage the organization will have among competitors.
Custom-built Products thus provide greater flexibility than OOTB (Out of the Box) packaged solutions. From quicker and business specific changes. Whereas OOTB Products may not provide flexibility and may require significant effort to make changes.
Custom products can meet your security, legal and compliance needs which are specific to the organizations. Organizations can ensure that the product meets all relevant security and compliance standards by building it in-house. With off-the-shelf software, you may have to make significant changes to meet those standards, which many times is a high friction effort.
On the downside, building products in-house generally takes longer and requires more internal resources than using an OOTB product. Organizations will have to arrange for time and money to design, develop, test, deploy, and manage the product.
Pros and Cons of BUY
Purchasing an OOTB product requires less effort, time and money than building a product in-house. OOTB product is already developed, so you do not have to allocate time and resources to designing, developing, and testing it which can save the organization a significant amount of resources and the opportunity cost.
The OOTB custom products also offer more features than custom-built software. Because OOTB products are developed for a wide range of users, it generally includes more functions than software designed for a specific organization.
Another advantage of buying software is that it’s usually easier to use than custom-built products. OOTB products are typically designed with a well-designed interface that is easy to navigate. Additionally, organizations can receive ongoing support, updates and the latest technology from solution providers. Some of these solutions are world class and should be considered when making the Build vs Buy decision.
There are some disadvantages when you decide to buy a product instead of building your own solution in-house. One disadvantage is that you may not be able to get the exact software that you want or need. Many at times it is more than what we need with many features packaged which may not be of any use to the business. As OOTB is designed for a wide range of users, it may not include some of the features that we require. Finally, the OOTB solution may not meet the compliance and security needs that are defined by the organization.
The items to consider for the Build Buy decision and points that need to be deliberated on are
There is no One Size Fits all answer to the Build or Buy decision. The factors listed above are a good place to start and in due course of time every decision will have their own set of reasons to Go for Build or Buy.