Buy Commodities, Build Differentiators
Initial Thoughts
Every team needs a Buy vs Build strategy, and while the process is not typically a simple one, using this as a rule will work well for most of these decisions.
Discovery
Many organisations fall into the trap of building bespoke solutions for problems that have already been solved.
Often the thinking that leads to this is a belief that our business is too complicated for an off-the-shelf solution to meet our needs properly, and a lot of time this thinking is correct. However, what is often forgotten about is the opportunity cost of building something that does not differentiate us from the competition.
The opposite can also be true, especially in the enterprise space. Organisations that do not see themselves as technology companies or want the safety net of every system having a support contract attached, often miss out on providing their customers with an offering that has clear advantages over the competition. If everything is built by another company then it becomes much harder to have a unique selling point.
Even when building is the correct choice we need to be sure we are building the right pieces. While creating your own authentication framework or payment processor can be a great side-quest for your engineers, it is unlikely to add value to the final product versus using a pre-existing solution.
There are two key hybrid models that will often be adopted for larger systems.
Rent The Builders
This approach involves bringing in temporary external resource to build a custom solution. This approach typically appeals to organisations that want to differentiate themselves but lack the confidence to invest in an internal team. The theory is that by bringing in specific expertise a system can be developed and deployed quickly, to a high standard. Unfortunately, what often happens with this approach is that the time investment required to ensure the external resource have a proper understanding of internal processes is often overlooked and organisations end up with a solution that is difficult to maintain which locks them in to an expensive support contract.
Buy The Platform, Build The Process
A good approach for solutions that are designed to be customised, such as a CRM, buying a platform with base functionality allows you to quickly take advantage of those capabilities. An internal team can then be recruited or trained in order to continuously improve the system over time.
Key Takeaway
If you can buy it, so can your competitors.
Engineers are best used when taking domain knowledge and turning it into digital solutions that provide the organisation with a competitive advantage.