Navigating a Classic IT Dilemma

Navigating the build vs buy dilemma, non-IT companies often face challenges with in-house IT application development, including limited technical expertise and maintenance complexities. A detailed assessment is crucial, considering feasibility, costs, and sustainability. Typically, a 'buy-first' approach is more suitable due to its lower risk and immediate benefits. However, for those opting to build, a product management approach is key to ensure sustainable success. The ultimate decision should be strategic, aligning with long-term business objectives and ROI.

In today's fast-paced digital world, every organization is on a digital transformation journey. Organizations whose core business is outside the realm of software development are, at times, building IT applications in-house. While these companies may not possess in-depth software development resources and structures, they recognize the increasing need for digital solutions to meet internal needs or stay competitive in the market.

Developing in-house may seem like a cost-effective solution initially. However, many non-IT companies often struggle down the road with maintaining, supporting, and growing their in-house built systems. In this blog, we will explore the challenges faced by non-IT companies when building IT applications in-house and discuss the importance of conducting a thorough build vs buy assessment for every IT application selection.

The temptation to build in-house

Non-IT companies often choose to build IT applications in-house for a variety of reasons. They may believe that building their own systems will provide greater control, customization, and cost savings compared to purchasing off-the-shelf solutions. Additionally, they may have unique business requirements that they believe cannot be fulfilled by existing commercial products. At times, the decision is not actively made, but rather the result of IT teams jumping into action when a need is identified. However, this decision can lead to challenges in the long run if not approached strategically.

One of the primary challenges non-IT companies face when building IT applications in-house is the limited availability of IT resources and product development knowledge. These companies may lack the necessary technical expertise to develop robust and scalable software solutions. The knowledge gap can result in inefficient development practices, poor system architecture, and suboptimal coding standards, leading to heavy technical debt as well as maintenance and support challenges down the line.

Another challenge that non-IT companies often encounter is the formation of knowledge bottlenecks and silos. When the development of IT applications is solely reliant on a small group of individuals within an organization, the risk of knowledge loss or dependence on specific individuals becomes significant. This dependency can cause delays in addressing issues, hinder system enhancements, and limit the ability to scale the application effectively. This results in an unsustainable situation that is difficult to manage.

Importance of a thorough build vs buy assessment

If in-house building can cause all the above concerns, how do organizations decide what to do? To make the right choice, the business should conduct a thorough build vs buy assessment for all its IT application selections. This assessment involves evaluating the feasibility, cost, customization requirements, and long-term sustainability of building an application in-house versus purchasing a commercial product.

By considering factors such as the availability of IT resources, time-to-deploy, implementation costs, and ongoing maintenance, companies can make an informed decision that aligns with their strategic goals.

Buy-first approach For non-IT companies, the buy-first approach generally aligns better with business goals. Buying allows the company to focus on its core purpose instead of diverting resources to software development. Lower initial costs and predictable ongoing expenses are more manageable for companies not specialized in IT. Off-the-shelf solutions can be implemented quickly, providing immediate benefits. Implementation of the off-the-shelf IT solutions requires limited specialized IT staff as the vendor provides support and maintenance. While customization and integration might be less flexible with off-the-shelf solutions, the overall benefits of cost, resource efficiency, and risk mitigation make the 'buy first' approach a sensible starting point for non-IT companies. As the company grows and its needs become more complex, it can reassess whether a custom-built solution is necessary. This approach allows for gradual adaptation without overwhelming the organization with the challenges of custom software development from the outset.   Leadership The' Buy' option becomes more favourable in non-IT companies where leaders are often non-technical. This is because these leaders may not fully understand the implications and challenges of building IT applications in-house - which is not a negative thing - because their core business is not software development. The lack of technical expertise at the leadership level can lead to challenges in decision-making, oversight, and management of a custom software development project. Buying a ready-made solution reduces the risk of mismanagement and aligns better with the existing leadership capabilities, making it a more pragmatic and safer choice for non-IT companies.

Product management approach

After the assessment, the companies may end up at the decision to build. This may be the right choice considering that building the application in-house will result in a key business differentiator or is a major contributor to business ROI. When you choose to build IT applications in-house, it is important to adopt a product management approach. This approach involves treating the developed system as a product with a lifecycle that extends beyond the initial development phase. It includes planning for operationalization, scalability, maintenance, support, and continuous improvement. By applying product management principles, companies can ensure the long-term sustainability and growth of their in-house built systems.

Conclusion

In conclusion, non-IT companies face unique challenges when choosing to build IT applications in-house. Limited IT resources and knowledge bottlenecks can hinder the maintenance, support, and scalability of the systems. However, by conducting a thorough build vs buy assessment and adopting a product management approach, non-IT companies can mitigate these challenges and achieve long-term success with their in-house built systems. It is crucial for organizations to recognize the importance of strategic planning, scalability, and continuous improvement to navigate the complexities of the digital transformation journey successfully.

For a non-IT company, the decision to build should be strategic and data-driven. It's important to conduct thorough market research, feasibility studies, and cost-benefit analyses. Consulting with IT experts and considering potential partnerships or collaborations for the development process can also provide valuable insights and help mitigate risks.

In summary, while the 'buy first' approach is generally advisable for non-IT companies, there are specific circumstances where building a custom application is not only beneficial but necessary for the company’s growth, differentiation, and long-term success. The decision to build should be based on a clear understanding of how the custom solution will contribute to the company’s ROI and strategic objectives.

About the Author

Asiya Shams, a seasoned Senior Consultant in the IT sector, brings her expertise to the forefront in this blog on the pivotal "build vs. buy" decisions in IT applications. With over 15 years of experience, Asiya has honed her skills in understanding intricate project requirements, assessing the most viable IT solutions, and guiding organizations through product development and product management. Her profound knowledge in implementing and integrating diverse IT applications, from ERP systems to AI diagnostics tools, is evident in her ability to navigate complex decision-making processes. Asiya's expertise in balancing technical needs with strategic objectives makes her insights invaluable for organizations wrestling with the build versus buy challenge.