Build vs Buy
June 6, 2017
As a consultant I have faced this particular question quite often at different clients. I don’t think there is a singular answer to this question so as a consultant we tend to give answer that usually starts with “Well it depends..”.
Following is the thought process that I usually follow. I have seen some of my coworkers do the same.
When does an organization invest in building custom software vs buying an off the shelf application?
Rule of Thumb:
- If it’s core to your business, build it.
- If there’s COTS and you are willing to change your process to match the tool, buy it.
- If there’s COTS and you have to do significant customization that doesn’t match their model, build it.
- If there’s COTS and you have to do insignificant customization within their model, buy it.
- If while you’re trying previous step and you realize that your customization is more significant and less of a match, see 3rd step and don’t fall into the sunk cost fallacy.
- If other services that are core to your business have to integrate with it, and evolving this integration is going to impact your ability to serve business needs, build it.
COTS - Commercial Off The Shelf