You’ve determined that your business needs a certain set of technologies to take it to the next level but you’re not sure whether you should build or buy the systems. For many small business owners, this can be a complicated decision, especially if your comfort level is in the business realm rather than the world of technology.
The build-or-buy dilemma is a common one and there are several criteria you can use to determine which course to take. The first question you should ask yourself is if the technology you need is readily available in the commercial sector. And, subsequently, if the commercial products are not exactly what you need, can they be modified to fit your needs?
In most cases, if the technology has already matured in the commercial marketplace there is no real reason to build it in-house unless you need something highly customized, or your technology team has figured out a way to create it using open source tools.
There are many advantages to open source, in that it is extremely flexible, compatible, and often free. However, open source developers are not free. You need such experts to build the systems and perform support and maintenance functions since open source technology does not come with the same guarantees and maintenance contracts that commercial products do. Fortunately, there are many open source developers in the marketplace these days, offering you a wide range of skills and rates.
Another factor is how much in-house help and expertise you have on hand. If you know exactly what you want and you have a crack team on the premises, developing your own the solution might be the right choice.
If you are leaning toward using commercial products, ask yourself if they are flexible and can grow with your business needs. Will these products be compatible with your other systems and the systems your clients use?
When investigating commercial products you will also want to determine whether there are several vendors in the same space. If there is competition in the market, you will have a greater variety of price points and services to choose from. If there is one big player in the market, you could get locked into a vendor that has no compelling reason to fight for your business.
Aside from the technology itself, put some thought into how you plan to maintain and support the systems. If there is no one in-house who has the skills to properly oversee the technology, it may be a good idea to align yourself with a trusted third-party vendor who can supply you with the expertise you need.
At the end of the day, building your own technology solution is a big decision, considering the range of options already available in the marketplace. Generally, there is a higher level of commitment involved since you will be responsible for success, operation, and maintenance of a system that is probably part of a core business process. That said, if the technological need is unique to your business, this may be reason enough to build and maintain it in-house.
So, let’s review the key questions factoring into your decision:
- Is the technology readily available in the commercial market?
- Can commercial products be customized to fit your specific needs?
- How flexible do you need your technology to be?
- Will the technology you’re considering grow with the needs of your business?
- Will it be compatible with your other systems and your clients’ systems?
- Do you have in-house experts who can build and maintain the technology?
It is important to lay down a technology investment strategy that aligns with the specific goals of your organization. Be sure to read How to Develop a Technology Investment Strategy for a good introduction to this topic.
Scarlet Pruitt is a freelance writer and business consultant based in San Francisco. She has covered business and technology for publications in the U.S., Europe, and Latin America.