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Build Versus Buy - Making
the Right Choice
The Problem
In the digital age of business, department heads
are often forced to address the conundrum of whether
or not it is better to buy an off-the-shelf product
to solve a problem, or build a custom solution .
The complexity of the situation and unforeseen consequences
can cause project delays, inevitably driving up costs
if careful forethought hasn’t been allocated
to address the true root of the problem
Project teams usually clash over to two schools
of thought; one believes that they can build anything
required and no off-the-shelf solution will fit their
needs, while the other sees the off-the-shelf solution
as economical and ‘good enough’ to for
the job. Both solutions have their merits, but often
a hybrid of the two makes the most sense.
The Decision
The first step towards a solution is to identify
your needs. This requires meeting with customers
and business units to hear their specific goals and
concerns. While it is unnecessary to capture every
detail, the more information that you obtain, the
better you will understand the problem. Prioritize
needs over short and long terms, and make sure that
the stakeholders agree with your evaluation.
Once you have identified and prioritized your needs,
the next step is to estimate how much each option
will cost, not just in money, but in time and effort
as well.
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Packaged Solutions |
Custom-Built
Solutions |
Hybrid Solutions |
| Meaning |
A generic solution provided by
a vendor. Examples would be ERP packages, CRM packages. |
A custom built solution with few
or no external components. |
Various packaged components from
different vendors using a custom code to integrate them
into a solution |
| Benefits |
The software quality can be better
and cheaper if it is a widely used package. Packaged
solutions may allow easier migration to newer options
in the future. |
Will better suit business needs
with greater control over the solution. Customizable
for maximum business advantage. |
The best of both worlds. More
customization to business needs and usually cheaper than
a custom-built solution. |
| Risks |
Vendor could go broke, product
is immature, additional expense for customization required
to meet business needs, requires major changes in existing
business processes, and so forth. |
The technology platform may be
immature, skills with the platform scarce, patches & enhancements
can become very costly. |
Technologies can clash; unforeseen
problems may arise with the coding. |
Possible
Costs |
Unending licensing fees,
infrastructure costs such as; servers, databases, networks.
Support
costs, training and customization required.
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Infrastructure costs, developmental
costs, employee training, quality assurance. |
Licensing fees, infrastructure
costs support, development costs, and training if the
team is using new technology, quality assurance, and
so on. |
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Reminder: Hiring
an external consultant is worth considering if you are
thinking of using a custom or hybrid system; the consultant
may already have many parts of the solution you need. Many
consulting companies have pre-constructed frameworks that
can be used to build a solution, which is much less expensive
than starting from scratch.
After you have weighed these options against your prioritized
needs, sit down with the stakeholders to reach a consensus
that everyone will find acceptable. Explore the benefits
and drawbacks of each option, keeping in mind how each
will affect the various departments of your business. Things
will inevitably change as you move along, something endemic
to every software project, but using an iterative development
style will smooth out most of the bumps in the road. |
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