Leaders of proactive business units will often recognize market opportunities that their existing technologies restrict them from capturing. They see the need for new capabilities but are frustrated by lack of resources available to them to implement the digital transformation desired.
Ill defined business requirements and changing market conditions often lead to rushed software buying decisions that negatively impact the ability to do business successfully. In the long-term this leads to inefficiencies, customer and employee dissatisfaction, divisiveness, and ultimately failure. A pragmatic yet creative approach requires experience and expertise that is not typically a core business competency outside of a consultancy specializing in digital transformation.
Let’s assume customer needs and business requirements are well defined. Technology then needs to be aligned to support those requirements. At some point a critical choice needs to be made on whether to integrate an off-the-shelf product or build a custom solution. The “build or buy” decision. In this series we’ll explore that decision making process based on productOps’ seasoned approach.
To help arrive at a build or buy decision we begin by digging into the following areas with our clients:
- Change - What is driving the interest in change? What is needed that is not currently available?
- Complexity - How complex is the business in terms of geography, demographics, internal support, manufacturing, product line? The greater the complexity, the less likely an off-the-shelf product will integrate satisfactorily and the more likely a deficiency in vendor support will occur.
- Timeline - Buying a product is quick but understanding how that product will work in the existing environment is often time consuming and done post purchase. How much integration is required? Who is responsible for doing that? Does corporate IT support the purchase and will they prioritize it
- Opportunity - What does the future of my product or service look like? Does my future lie in expanding my product line or growing awareness around a single product.
- Flexibility - What potential changes could impact the business? How easily can new functionality be added? For example, a Business Intelligence dashboard for the CEO.
- Scalability - Will the solution I invest in efficiently scale up and down with demand to reduce cost and provide a stellar user experience? What if a product or service takes off quickly, or has extreme and unpredictable demand cycles. Are acquisitions likely?
- Integration - Can the new system operate as a standalone (unlikely) or does it have to integrate with other, existing corporate systems like HR, billing and sales? If so, who is going to make that integration work? Internal teams? What are the politics of that and who are the stakeholders that would make it happen?
- Cost - Often the true cost is not understood until long after the initial purchase of a product. What is the cost (both financial and lost opportunity cost) of engineering in the requirements to support unexpected flexibility and scalability? How about the cost of adjusting to opportunity changes? What is the cost of a delayed product launch or protracted time to market due to insufficient vendor support?
This is not a complete list but defining these elements in depth with all stakeholders will help to support buy-in across the organization and lead to the right decision. By framing answers around these aspects, and where possible providing data, we can look at when an off-the-shelf product or a custom solution is the right call.
In Part 2 of this series we'll examine when and why an Off-the-Shelf or a Custom solution may be the appropriate choice.