Whether you’re a start-up or a well-established company, chances are a new or enhanced software product might be in your future. As you evaluate your particular needs, you may weigh the differences in buying an off-the-shelf solution, partnering with a complementary third-party solution provider or building the solution. Any of these are viable options and deserve careful consideration, but determining the best approach to address your unique requirements can be overwhelming.

While trying to decide which option is best for your organization, there are a few key considerations to keep in mind as a product manager, executive, or even investor.

Key Considerations

Before diving straight into your assessment of options, your organization’s strategic direction, key objectives and ability to operationalize and execute any of the options should be understood. All of these are important to understand early in the process for an informed assessment, otherwise the likelihood of an expensive mistake increases.

For example, having answers to particular questions within each of the following aspects of your business will be important. These will likely include:

Strategic Direction

• How well does the solution (and the approach to the solution) align with your corporate vision and strategy?
• What are the primary drivers?
• What are the main risks and how much risk are you willing to accept?
• What are the economic considerations and potential constraints?
• Do you have a grasp on both current and anticipated future needs?

Key Objectives

• Is this a new client acquisition play?
• Is this an existing client retention play?
• Are you trying to penetrate a new market?
• Is this a means to increase your share of existing market?
• Does this create new or enhanced revenue streams?
• Will this improve brand recognition?

Execution

• Does one of the Build, Buy, Partner options better fit with your existing culture?
• How willing is your organization to accept change if the selected option is different than past decisions?
• Do you have the required talent to accomplish any option? One better than the others?
• Do you have the supporting infrastructure, people, processes, tools and technologies to drive success? If not, what will be required to get you there?
• Is the company, at all levels, fully committed to the solution’s success?
• How does all this fit into the bigger picture and compete with other established priorities?

Additionally, examining how the new or enhanced product fits into the total technology ecosystem is important. This ecosystem may include other third-party products and/or services, software applications, hardware devices and cloud hosting solutions. It’s likely that most, if not all, of these otherwise disparate systems will need to integrate and interoperate with each other. Understanding how all these fit together is essential.

Dream Team

An objective assessment of available options requires skilled resources with business, financial, and technical expertise. Ideally, this person (or people) will be able to act collaboratively and not be overly persuaded by internal influences or his/her own emotional ties to existing solutions. After all, an unbiased, fair, and objective evaluation of all possible options is needed for a successful product. In fact, you may want to consider external consultative support to assist with your assessment. This is often preferred to, among other things, ensure an outside and balanced perspective.

Build, Buy, or Partner

Your evaluation may lead your company to buy or license an existing off-the-shelf solution from a third-party. There are many advantages to this approach including speed to market and having a proven solution with a referenceable client base. There are also many challenges, including the lack of customization abilities to address your unique requirements and the total cost of ownership over the life of the product may not be sustainable.

You may determine that aligning with a complementary solution in the market makes sense. The advantages, challenges, and trade-offs with this approach are very similar to the “buy” option.

If the buy or partner route don’t seem like the right options for your business, having a solution built that is tailored to your exact requirements could be right for you. Among the advantages to this approach is that the solution can be designed and built precisely to your needs and evolved naturally as your business needs require. To be successful however, this approach requires a certain level of internal operational maturity and discipline, and a firm commitment across the organization.

The build, buy or partner decision is strategic in nature. Each company is different, and its circumstances will determine its approach to the process and ultimate solution decision.

Want to learn more about each of the build, buy or partner options? In future posts, we will dive deeper into each possibility to help equip you to make the best decision for your organization. Have questions about your solution options before then? Feel free to contact us.