Business Guide
simplicable technology guide   »  enterprise software   »  buy vs build decision

Buy vs Build Decision Tree

        posted by , April 27, 2011

A decision tree is a good way to apply consistent and transparent criteria to your buy vs build choices.

buy vs build

a. Commercial Off the Shelf (COTS) available?

Are there fit for purpose products in the marketplace? Ideally there should be 3 or 4 competing products in the space.

b. Area of competitive advantage?

Competitive Advantage (CA) is a widely overused term. True CA means that you can do something better than any of your competitors.

It is common to see competitive advantage mentioned in the business case for COTS investments. However, it is not really CA when you are implementing the same tool everyone else is using.

In core business areas you may want to build — if you believe you can do it better than anyone else. For example, large investment banks often implement their own algorithmic trading systems in an effort to beat the competition.

c. COTS too expensive?

Some architects take a COTS at any price approach — this is a mistake. COTS products can be expensive. If you can build similar functionality at a lower cost — go for it.

d. COTS customization > 8%

There is no point investing in COTS if the customization effort is significant. If your total customization effort is >8% it is likely easier to build.

Due Diligence

The decision tree is just a starting point — investment in a COTS tool warrants significant due diligence.

3 Shares Google Twitter Facebook

Related Articles

Enterprise Architecture
How to architect an organization.

As with any emerging field, the definition of big data is always in flex.

How do you covert the knowledge in an architect's head into valuable metrics?

Enterprise Software

Have your architecture and enforce it too.

Recently on Simplicable

IT ROI is Fading Fast as a Measure of IT Success

posted by Anna Mar
Somebody tell the CFO — IT ROI has gone the way of the dinosaurs.

9 ITIL Implementation Challenges

posted by Anna Mar
ITIL implementation is no cakewalk. ITIL impacts your entire organization — your business, your IT department and your inflight projects.

IT Management

posted by John Spacey
Tools and strategies for IT managers.

Why Big Data is Hype (and Why It's Not)

posted by Anna Mar
Big data is an earth shaking innovation!


about     contact     sitemap     privacy     terms of service     copyright