Anticlue

Buying vs Building

The other day, I ran into a colleague of mine. Somehow in our conversation, we came across the concept of buying versus building. After a little bit of thought, I think the question is larger than buying versus building.

Basically here is the scenario, someone sees or thinks of some technology tool that would make their job easier. Then the question becomes whether you buy a product that does the job or you build a product that does the job.

The decision depends on alot of factors. First, although you may try, you can't possibly buy everything that works for your business solutions. There will always be outliers, things that you can't find a reasonable solution for, or items that just need to be built. My best guess is that one can probably reasonably purchase 85 - 90 % of the needed information technology tools for a healthcare enterprise. There are build needs, just have a clear process in-house to identify when something needs to be built.

Next comes to the monetary investment, the institution wants to make. When asking this question, my favorite answer is "We don't have the money in this type of product, so could we just build one." List the maintenance, first time naviety, testing scenarios needed, time to build, and opportunity cost of building this item versus others, as reasons why lack of money is a very poor reason to build a product. (Unless your organization plans to sell that product to make $$$)

Another aspect is the level of risk that is acceptable to the organization. If you are working in an organization on the bleeding edge of technology, that has a high risk propensity maybe building is for you. Maybe building a fantastic custom product out weighs the fact that when it breaks you have no one to call. On the other hand, if you are working in an organization that is on the edge of technology, and is known to be very risk adverse. Maybe buying something that others have installed elsewhere is the road for you.

Drilling down and examining the benefit of having someone to call about a purchased application is sometimes critical. The purchased application will continue to be enhanced by suggestions from multiple organizations using the app. There will be support maintenance fees, but these maybe a low cost when considering the value of having support available instead of your business being down and unable to function.

Another aspect is you don't need to worry about turnover of internal staff. If you build a custom system, and that builder leaves the organization. You don't need to worry about training other programmers in maintaining the custom application. Even if the company goes bankrupt, it is more than likely another software company will purchase the product and continue to support it. An organization does have to worry about the sunsetting of applications, but that would be the same case with a built tool.

There are many other aspects not covered here on this question, but I'd like to leave with this note. Given the limited resources, time, and other constraints don't build an inhouse solution just because there isn't money to buy something. That custom solution will probably be far more costly in the long run, than investing in a tool.