Build vs Buy Revisited
In the last twelve months, several organisations that decided to build their own software solutions to support their core business experienced catastrophic failures. For every successful in-house software development project there are thousands that don't make it.
In attempting to understand why organisations embark on the risky proposition of building rather than buying off-the-shelf, three tell-tale signs consistently emerge.
Three Tell-Tale Signs You're Making the Wrong Call
1. A Mistaken Belief That Build Is More Cost Effective
While the initial cost of buying may appear higher than building, the total cost of ownership for build is never truly calculated over the life of the solution. The economics rarely stack up when looked at honestly over a five to ten year horizon.
2. An Ambitious Leader Without True Build Experience
In nearly all cases, the leader championing the build strategy does not have relevant experience delivering software at scale. More worryingly, the board often lacks the skill set to ask the right questions and thoroughly assess the risk profile associated with a build endeavour.
3. Disillusionment With the Current Vendor
A breakdown in the vendor relationship — or the incumbent's inability to respond to changing business needs — can cast all buy options in a bad light. This creates a false sense of requirements uniqueness that leads organisations to believe only a custom build can meet their needs.
How to Mitigate the Risks
- Employ a strong project management approach with robust governance, skilled individuals, and external peer reviews. Expand scope to include change management and ongoing support and maintenance — this surfaces the true cost of ownership for build over the life of the solution and creates a balanced view against buy.
- Learn from the failures of other organisations. Ensure your board and key stakeholders are well informed and equipped to assess the risks associated with a build endeavour.
- Understand the true reasons why the current solution is not meeting expectations. Conduct a thorough market scan to confirm what off-the-shelf alternatives exist. Understand what your peers and competitors are using and gain a thorough appreciation of their technology investment roadmaps.
The Bottom Line
Whatever the reason that led you to consider a business transformation through new core systems and platforms, ensure the project team has a strong blend of internal and external resources who have done it before.
Mulberry Group is a trusted C-level partner helping organisations make pragmatic technology investment decisions. To discuss your build vs buy decision, get in touch.
By Dimitrios Bairaktaris PhD | February 12, 2025