With the rampant pace of change in almost every business sector today, having the right technology to support business agility has become critical.
These waves of disruption are caused by converging trends like high-speed connectivity, Cloud computing, mobility, Big Data, social media, intelligent process automation, digital transformation and the Internet of Things… (to name a few).
Emerging from this flurry of activity is the concept of ‘bi-modal IT’ – the coexistence of traditional IT (stability, efficiency and security) with newer-age principles such as agility, scalability, innovation, and exploring frontier digitization.
Bi-modal IT, and the new marketplaces that are emerging in today’s increasingly digital world, are throwing new perspectives onto the perennial technology debate known as ‘build vs buy’.
Simply put, ‘build vs buy’ is the conundrum facing organisations when considering their future IT needs – should I build a customised business solution from scratch, or shape an off-the-shelf product provided by a third party?
Staying ahead of the pack
To achieve sustainable competitive advantage – to be faster, more flexible, more extensible, and more differentiated from the market – it seems the pendulum is swinging back towards ‘build’ as the best option in most cases.
In fact, it sometimes seems that, for CIOs, legacy IT is increasingly an albatross hanging from their necks. Consider the following:
- A large amount of ‘bought’ IT is never used
- Some has been rendered obsolete by changing business and market dynamics
- And the rest often becomes incredibly expensive to maintain and difficult to manage
For example, a recent report* by analyst firm The Standish Group revealed the starting fact that, on average, only 7% of bought software is actually used by the business.
But it isn’t just the efficiency gains that skew the debate more towards the ‘build’ side. The bi-modal world demands that organisations have greater control over their IT assets, and build capabilities that can respond to customers and support business strategies in weeks (not months or years).
The more proprietary one’s architecture, the more difficult it becomes to build a bimodal delivery capability.
This is why it’s so critical to have a build capability on hand.
How to decide?
When faced with a build vs buy decision, it’s handy to keep in mind a few guiding principles, such as:
- Consider your legacy modernisation roadmap… understand where you’re locked in or dependent on vendors (in terms of contracts, technologies and required skills), and develop a plan to retire legacy systems in increments.
- Follow the 80/20 rule… buy new software that has at least an 80% “out the box fit” for your core business. If it requires any more customisation than that, it’s better to build.
- Whatever you buy should be based on open standards… and have APIs which you can extend, expose, and easily integrate into the rest of your technology estate.
- Start “chunking”… as you develop your build capability, adopt the philosophies of minimal viable products, lean startup approaches, discovery, prototyping, user validation – to ensure that what you build is serving the current business or customer need.
- Maintain a business imperatives model… to keep a firm grasp on your changing market landscape and the impending disruptive forces that could force you to adjust your approach to technology.
So, while the future remains as uncertain as ever, creating a strong ‘build and respond’ capability and capacity can play a role in future-proofing the organisation against changing market dynamics and fierce competition.