To build or to buy: The 10 factors CIOs must consider


As customers demand ever more personalised and consistent omnichannel communication—and inadvertently drive digital transformation in the process—every business is compelled to design and deliver exceptional experiences both online and offline. This exploration leads to companies investing in unified customer profiles which rely on machine learning to power intelligent decisions in real time.

Traditionally this entailed building a custom application in-house, partly because of concerns that a third-party solution wouldn’t meet the organisation’s specific needs or connect with its systems, and partly because they didn’t know about buy options for digital banking. And while IT teams are often perfectly capable of building tailored software, it can be an expensive pursuit and distract from other mission-critical work. What’s more, IT teams are sometimes hindered by outdated architecture, unintegrated technologies, and uncaptured user data, all while trying to stay ahead of digital and competitor innovation and customers’ growing expectation for personalised experiences.

But times are changing and, more than ever, members of the C suite are expected to lead their enterprises in executing cost-effective and scalable technology investments which balance the business’s immediate needs with its long-term growth. The decision to build or to buy is often far from easy—but with a strong grasp of the 10 factors to consider when deciding which path to take, you can more quickly and more efficiently choose depending on your circumstances.

1) Cost

Internal IT projects enable businesses to decide how much to spend on development—but on the flip side, these projects have a habit of taking longer than expected, and costing more than estimated. After accounting for the cost of the initial build, support, upgrades, bug fixes, and staying ahead of market trends, one in six IT projects has an average cost overrun of 200%, and a schedule overrun of almost 70%. Conversely, while purchased software may have a seemingly high upfront cost or a subscription fee, it remains nevertheless a known and onetime expense, for a product that’s ready to use immediately. Many CIOs significantly prefer a fixed cost to the unpredictability associated with building software in-house.

2) Control

Perhaps the single greatest appeal of building software in-house is the notion it can be moulded to meet your company’s unique requirements, even as they evolve. However, that also means you’ll always be reliant on the developers tasked with its building. You might just be surprised at how common it is for businesses to be left with unusable codebases created by developers who no longer work there. This adds an ongoing maintenance cost as you hire someone to rebuild the codebase from scratch.

3) Connectivity

Every company has its own ecosystem of applications which must be compatible with systems external to the company, such as marketing destinations. Building your own solution can ensure these connections are constructed, as long as your team has the capabilities to undertake the extensive process of stitching together multiple smaller solutions. Chances are, though, a more advanced and comprehensive solution already exists on the market. Some commercial software solutions can even act as an extension of your existing ecosystem, rather than entirely overhauling the architecture your IT team has laboured to build.

4) Maintenance and innovation

Building software in-house means not having to rely on an external team to develop new features or roll out upgrades—but on the other hand, most internal teams haven’t the availability or expertise of external teams to deal with the complex architectures typical of global companies. Furthermore, customer needs change constantly: by the time you’ve built the software, their scope may have already shifted. An experienced team equipped with best practices and the latest market insights will be better able to handle maintenance for the enterprise-scale software you’re after.

5) Use cases

The use case behind the platform influences who its stakeholders will be, and who will use it in their day-to-day lives. When building a platform for data collection, machine learning, and reporting, for example, the stakeholders will generally be data analysts, engineers, and scientists, deeply technical and comfortable working with data. A platform intended to drive customer experiences may have the same technical stakeholders, but it must also cater to business and marketing users, as well as others who require a user-friendly interface to frictionlessly interact with data.

6) Readiness

Regardless of whether you build or buy your software, some disruption is inevitable—but its scale must be accounted for when deciding on your course of action. Traditionally, companies operate with siloed marketing and development teams, each with their own data sets and processes. As a result, introducing a platform without first considering how it’s going to affect the working relationship between the two siloed teams can lead to drastically reduced productivity. People need to be in a position to embrace change. So first, evaluate what organisational changes would be necessary to build vs buy.

7) Project scope

Is the problem you’re solving common in your industry or unique to your company? Many issues enterprises face have already been resoundingly solved by commercial software, but if your needs fall within edge cases beyond what’s on the market you may need to build. That being said, could your teams deal with the complexity of a solution spanning multiple geographies and complying with data regulations such as CCPA and GDPR? If not, buying is best, as this saves time and resources, and ensures you the peace of mind that you’re adhering to every regulation. Remember, a solution that cuts or negates the risk of noncompliance pays for itself when held up against the egregious fines you could face if the solution you’ve built in-house fails to provide adequate governance.

8) Resources

When building software, you must ensure your company has the people, time, and computing resources to see development through to completion—even if it exceeds budget. Consider too the potential impact of pulling resources away from activities that drive your organisation’s mission. For many businesses, building a platform intended for data collection, insights, and analysis safely aligns with their core business—but one that requires realtime communication and orchestration of content, customer experiences, and user profiles would serve only to lead their teams astray.

9) Opportunity cost

Will building the software in-house significantly distract employees from working to solve the core business problems that are impacting the bottom line? Ideally, your IT teams should be focusing on data and building the infrastructure to gain, report, and predict mission-critical insights. Rather than overloading them with tasks beyond their capacity, consider offloading insights to an external entity specially designed for communication and orchestration. Delegating complex tasks in this manner empowers your team to focus on what they do best, while a specialised company exclusively takes care of amplifying their efforts and transforming your data into exceptional customer experiences.

10) Time to value

A shorter time to value doesn’t just help you keep customers engaged while positioning to stay ahead of the competition, but also drives revenue and income earlier—and captures customer loyalty sooner. Can your team develop the platform within a reasonable timeframe, and keep up with ever-evolving requirements to ensure the final product truly addresses the problems it was created to solve in the first place, rather than causing more trouble than it’s worth? And if the challenges your organisation faces are time-sensitive, ask yourself: how long can you wait before those issues damage business? When time is of the essence, buying software addresses immediate needs, meaning you’re not waiting potentially years for a solution to be built internally.

The Toqio verdict

Building a custom platform can be a smart investment for some enterprises, but should be considered only if the company has the time and resources for reliable development. A solid strategy is also paramount to ensure connectivity with applications beyond the business to ensure long-term viability, along with user interfaces that are available and intuitive for day-to-day use.

When resources are sacred and leading digital transformation is a top priority, investing in rather than building an extensible and comprehensive platform generally reduces costs while maximising performance. It also guarantees a specialised solution which can be continually enhanced by a dedicated partner, who can in turn support your staff. That’s where Toqio comes in.

Toqio’s white label digital finance SaaS enables businesses to quickly launch and monetise new financial solutions to their customers. With Toqio, in less than eight weeks you can configure your product suite, select the right partners, apply your branding, and execute an effective launch. Get in touch today, and one of our friendly advisors will help you get the ball rolling setting up your very own distinctive digital banking solution—and save time, money, and heartache, both now and in the long run.

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