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The ideas explored in this article are part of a much deeper set of insights we at Modyo have been compiling during our work with clients, prospects, and partners across North America, South America, Europe, and India. Acknowledging that the upcoming year is crucial for many decision makers, these 8 considerations are a preview for an eBook we’re launching later this quarter. We want to empower business leadership and arm them with frameworks and mental models to make better decisions for their long-term digital channel development. 

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Let’s consider an age-old question: do I build my new application from scratch or do I buy a solution that’s already on the market? Each decision comes with its own benefits and limitations. On one hand, building a solution lets you align with the unique needs of your organization, but requires a larger investment and a trained team. On the other hand, buying saves time and lets you outsource some technical headaches. With it though, comes vendor risks and simply buying may not adequately address all your needs.

Making a build or buy decision can be foundational to your enterprise’s digital strategy. Decisions made today will have lasting impacts into the future. The following list seeks to provide a starting point to help leaders who are struggling to evaluate options. From here, you can build a business case and/or framework to support your decision. 

8 Influential Factors When Building vs. Buying

Consider eight factors that may pull your attention towards either build or buy choices and assess what would be the best course of action for your organization: 

1. Fully customizable vs. unique edge case 

If your needs are unique or exclusive, you may have exact specifications that address the particular needs of your business. If this is the scenario, it rarely makes sense to buy. You need to build. 

2. Leadership focus 

A strategy of creating everything from scratch might not be well supported by leadership. Because of complexity, options to build from scratch are likely to lose focus and therefore, their sense priority becomes reduced. Leadership dedicated to a clear case will have more focus on the investment of resources to deliver. To combat low engagement, buying a solution with guardrails is the lowest friction approach toward wider adoption by decision makers within your organization.

3. Opportunity cost 

Ask any developer and they’ll tell you that building always has delays. More so than when you have an off-the-shelf solution. When choosing to build or buy, be sure to check if your leadership is willing to wait and how much impact that will have if you anticipate delays in launch dates.

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4. Exposure to market risk

Choosing to go with software from an external vendor exposes your organization to risk. You may compromise your own business if your selected provider goes out of business themselves, or if they have poor security standards. What could happen to your solution? If this is your chief concern, either develop internally or create a rigorous process to vet vendors, considering their security protocols, experience in your industry, and business continuity plans.

5. Well-defined use case

Choosing to build or buy without having certainty around your specific use case could lead to adopting a tool that does not address your needs. Take enough time to consider and analyze what problem you want to solve with your team before making a decision. Make sure you're not only taking leadership into account. Speak with future users of the solution within your company to reach a more holistic, informed decision. If no solution meets your thorough criteria, this may be a sign that you should build from scratch.

Reunion De Pie 6. Line of sight

If your business is threatened, you don’t have the luxury to wait to solve certain problems. In cases like this, use a product that already exists. Look for solutions on the market that are the most similar and fit your needs. Investing in a sustainable, digital factory for the long term isn’t a viable solution for everyone.

7. Economies of scale

When you buy an enterprise-level solution, there are cost advantages. See if a feature-rich solution could solve problems in other areas of your business. In the long run, you could gain financial efficiencies if your scope is wide enough due to the versatility of the solution you invest in.

8. Hybrid: Building and buying

Next-generation solutions are emerging that allow for high degrees of customization while offering a robust architecture. When a large project starts to take place, having the best of both worlds—buying and building—is the right path to follow. Customizing existing layers while building a new core set of functionalities brings value in the short term. It also allows for iteration over time without having to commit disproportionate amounts of money upfront. The benefits of hybrid solutions will be elaborated on in the next section.

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Tug o’ War

In the minds of many executives, deciding between building or buying is a zero-sum game. No matter what, pulling in either direction will chip away at the other side. There is, however, an alternative. 

Consider the hybrid approach. That is, a platform that empowers your teams to build bespoke solutions while leveraging built-in capabilities. Having a solution that lies between starting completely from scratch, and a reference architecture or defined infrastructure accelerates your transformation efforts. It's a false dichotomy when organizations deliberate between solutions that have it all versus having to develop from scratch. The comparison is not fully one versus the other. 

At Modyo, we’ve created a hybrid solution that gives developers and business leaders the best of both worlds. Organizations buy a cloud-native architecture that manages non-operational and regulatory complexities, letting both technical and non-technical teams focus on value creation for their customers. They can then build their own solutions on the platform using industry standard technology, which mitigates the risk of vendor lock-in and accelerates the time to market of new digital products. Today, businesses are leveraging the capabilities Modyo offers to create better digital experiences.

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While these eight factors may not cover every possible situation, they help build a solid case around which decision to make. Take an honest look at your business’ needs, evaluate each of these eight considerations, and synthesize your insights into a robust digital strategy.

Expectations surrounding technology are constantly in flux. What was recently cutting-edge is now commodity and, as a first-step, leaders need to learn how to make informed decisions in a way that’s both structured and future-oriented. 

If you find content like this interesting, as well as other topics ranging from digital product best practices to case studies and more, sign up for the Modyo Monthly Digest and get insights mailed directly to your inbox.

Photo by Greg Rosenke on Unsplash.