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Buy vs. Build: Lessons from the Frontlines
Posted by:Inna Berkovich, September - 18 - 2023


In the strategic landscape of ‘Buy vs. Build’ choices, think of each decision as a calculated chess move, not a coin flip. Each option you consider should resonate with your organization’s unique objectives, size, and operational nuances. Based on our extensive experience helping numerous companies through this critical decision-making process, we’re here to spotlight the methodologies that should either be embraced, fine-tuned, or abandoned to optimize your ‘Buy vs. Build’ assessments.

By diving into this article, you’ll gain actionable insights that go beyond the ordinary, arming you with strategies to make more informed and impactful decisions.

So, are you ready to unravel the complexities? Let’s get to it.

Continue: Strengthening Your Foundations

When it comes to current practices that are consistently effective, we’ve pinpointed several areas where organizations tend to excel. These methods often act as the cornerstone for making well-informed, strategic Buy vs. Build decisions:

Vendor Research and Market Analysis: Firms often thrive in scrutinizing potential suppliers and understanding market dynamics. This due diligence can reveal whether an off-the-shelf solution can suffice, thereby conserving resources.

Initial Budget Allocation: Many organizations are skilled at setting a foundational budget for the project, providing a financial framework for the entire decision-making process.
Stakeholder Involvement: Including key stakeholders from various departments early on ensures that multiple viewpoints are considered, contributing to a more successful outcome.

Identifying Core Business Needs: Companies generally do well at pinpointing their essential requirements before exploring solutions. This focused evaluation not only streamlines the decision-making process but also ensures that the solution you choose becomes a strategic asset, aligned with your key business objectives.

Time-to-Market Estimates: A lot of companies are keenly aware of this factor, often making it a key metric in their ‘Buy vs. Build’

evaluations. This allows them to align their choices with market opportunities and seasonal trends, ensuring they don’t miss the boat.

Legal and Compliance Checks: Companies are proficient at understanding the legal and compliance aspects of their options, ensuring

that the chosen solution adheres to relevant laws and industry standards.

Post-Implementation Support: Most have already integrated this consideration into their ‘Buy vs. Build’ decision-making, recognizing

that a solution’s life cycle extends far beyond the initial rollout. This ensures that the chosen solution continues to deliver long after it has gone live.

By consistently applying these proven approaches, organizations can streamline their ‘Buy vs. Build’ evaluations, mitigate risk, and align more closely with their strategic goals.

Stop: Rethinking Common Pitfalls.

While several aspects of the ‘Buy vs. Build’ decision process generally perform well, there are specific practices that often lead companies astray. Our in-depth consultations across numerous enterprises have highlighted these pitfalls to be aware of:

Ignoring Standardization: Over-customizing can lead to an unwieldy solution that’s hard to manage. It’s crucial to find a balance between customization and standardization.

Overlooking Outsourcing Options: In-house isn’t always better. Not considering outsourcing as a viable alternative can limit your strategic options and possibly increase costs.

Skimping on Risk Assessments: A casual attitude toward identifying potential risks can jeopardize the entire project. Rigorous risk assessment is non-negotiable.

Assuming Vendor Size Equates to Quality: Bigger isn’t always better. A large vendor may not offer the agility or specialized attention that a smaller or more niche provider could.

Tunnel Vision on Costs: Though upfront costs are important, a myopic focus can blind you to long-term expenses or benefits. A comprehensive look at ROI is essential.

Isolated Decision-Making: To ensure the solution aligns with overall organizational needs, the input should come from multiple departments, not just IT or Finance. Include stakeholders from HR, Marketing, and Operations for a 360-degree view.
Overlooking Scalability: Falling into the trap of choosing a solution that meets only your immediate needs can bottleneck your future growth. Always opt for a platform that can adapt and scale with your evolving business landscape.

By taking a hard look at these practices, you can refine your approach to ‘Buy vs. Build’ decisions, aligning more closely with your long-term goals while sidestepping common pitfalls.

Start: Raising the Bar in ‘Buy vs. Build’ Decisions

Informed by hands-on consultations on ‘Buy vs. Build’ evaluations, we’ve pinpointed several underutilized strategies that could provide a significant competitive advantage. These are the key practices that many organizations overlook but would do well to start adopting:

Comprehensive TCO (Total Cost of Ownership): Extend your financial analysis to consider ongoing costs like maintenance, updates, and even exit costs.

Rollout Considerations: Decide on the rollout strategy in advance, whether it’s a “Big Bang” immediate implementation or a more cautious, phased approach.

Skill Gap Analysis: Prioritize an internal audit to identify if your team has the capabilities to successfully execute or manage the solution you’re considering.
Vendor Scorecards: Adopt a comprehensive scoring system that not only evaluates vendors on factors like reliability, cost, and support, but also rigorously assesses their cybersecurity measures.

Understand OOB (Out-of-Box) Features: This helps you assess how closely the platform aligns with your business needs without any modifications, allows you to identify the areas where you might require additional customization or third-party integrations, and offers a baseline for comparing different solutions. OOB features can also serve as a benchmark against which you can measure any additional customization costs, not just in financial terms but also in time and complexity.

Essential Customization Assessment: Distinguish between your “must-have” and “nice-to-have” customizations from the get-go, ensuring your chosen solution aligns perfectly with your non-negotiable requirements.

Pilot Testing: Before committing to a large-scale roll-out, launch a smaller pilot test. This not only identifies potential hiccups but also serves as a valuable platform for stakeholder feedback, ensuring your solution is technically sound and organizationally aligned.

Integrating these advanced strategies will position your organization for sharper, more calculated ‘Buy vs. Build’ decisions.

🚀Start 🛑Stop 🔄Continue
Comprehensive TCO Analysis Ignoring Standardization Vendor Research
Rollout Strategy Planning Overlooking Outsourcing Initial Budget Allocation
Initial Budget Allocation Skimping on Risk Assessments Stakeholder Involvement
Vendor Scorecards Vendor Size = Quality Myth Identifying Core Business Needs
Understand OOB Features Tunnel Vision on Costs Legal & Compliance Checks
Must-have vs. Nice-to-have Isolated Decision-Making Post-Implementation Support
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Inna Berkovich

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