Build vs. Buy: Choosing the Right Software for Your Business

Faster than any corporate strategy or executive initiative, the COVID-19 pandemic has accelerated the business’ adoption of digital technologies as never seen before. Forced to adjust rapidly and find new ways to connect with customers, partners, and their whole ecosystem, organizations in all industries implemented new digital experiences and embraced new ideas and business models, accelerating the share of digitally enabled products in their portfolios by seven years.

This need for speed has raised the old but still relevant build vs. buy dilemma.

In this article, we’ll explore the key factors IT leaders should consider when deciding whether to build or buy software and explore why the “build” approach is gaining momentum thanks to the emergence of new technology and modern development approaches.

Key factors when considering build vs. buy

Let’s start from the very beginning: when should you build, and when should you buy software?

We’ve been told that there are six factors to consider when building or buying technologies. Those include:

• Cost: evaluate the financial implications of both building and buying software approaches.
• Time-to-market: assess your timeline and urgency.
• Customization and flexibility: evaluate customization and flexibility required for your software solution.
• Expertise and resources: assess the availability of in-house expertise and resources.
• Scalability and maintenance: consider the software's long-term scalability and maintenance requirements.
• Competitive advantage: evaluate if the software's uniqueness or proprietary nature provides a competitive advantage for your business.

Benefits and challenges of build and buy approaches

Considering the traditional view on software development, there are benefits to building software and benefits to buying it. But both approaches also have pitfalls.

Looking at the list above, we can quickly understand the benefits and challenges of both approaches.

The question is: are these factors still applicable to today’s reality?

We’ve always been told not to reinvent the wheel; always buy software if possible because there are very smart companies with great solutions that support “exactly what you need”. You should only build when your business lives in a somewhat niche area of the market poorly served by package software.

However, every resilient business is a snowflake - no two are 100% the same, and it keeps changing. When you digitally transform your business, you turn everything about it into software, from policies and processes to procedures, data, and even its know-how.

The problem with prioritizing buying over building is that whenever you need to change operations, the software you bought to solve that problem doesn't change easily because it wasn’t architected for change, and varnish customization is not enough.

Additionally, in today’s frenzy explosion of SaaS services where different lines of business acquire additional software to solve their specific needs, organizations end up with several systems that don’t integrate seamlessly with each other.

In the worse case scenarios, you end up with a “human API”, where users must manually copy-paste data, navigate between screens, and accrue all sorts of workarounds, like spreadsheets, to compensate for the lack of integration between the multiple solutions, all just to do what the software you bought was supposed to do.

Why is “building” gaining momentum?

The answer is simple: post-pandemic and the pressure to move customers' operations to the digital arena, and the quest to provide better experiences, both for customers and employees.

The philosophy of tweaking only the front-end because it’s what impacts customers directly, but keeping the back office systems slow and disconnected doesn’t work anymore.

Everything is integrated, and if something in the back office doesn’t work well, the app experience breaks really fast, and adoption fails.

So, in today’s fast-changing world, even the most internal system has to change eventually to cope with unforeseen circumstances. And when you’re dealing with standard SaaS or COTS systems, even if they’re the best in class, they don’t change quickly because they weren’t made with the peculiarities of your businesses in mind.

Redefining build vs. buy assumptions

There are two critical assumptions that organizations need to realize when it comes to choosing between build or buy software approach:

1. Businesses are like snowflakes, and organizations shouldn’t underestimate the peculiarities of their business. So, unless your off-the-shelf application is built for change—and most of them aren’t—it’ll take more time and be more painful and expensive to customize to your business needs.
2. Technologies keep changing rapidly. Today, build shouldn’t be seen as a herculean effort, where you need a huge team to write thousands or millions of lines of code, as it happened in the past. Cloud platforms have evolved dramatically over the last five years; modern development approaches like DevOps, agile, and enterprise low-code platforms have accelerated the development process, and quality checks are built-in. So, product teams don’t have to “start from scratch” when building an application; they can use cloud services and business APIs to compose and deliver customized solutions much faster, more adaptive, and cheaper than before.

Moreover, there’s a lot of value in creating apps in platforms that allow you to reuse proven modular building blocks that include security, governance, and compliance management in the platform. This way, integrating systems and providing a seamless navigation experience becomes a reality without needing a “human API” or repetitive RPA bots to fix what the solution was supposed to do from the beginning.

The question shouldn’t be “build versus buy” but “customize versus compose”.

You either buy a standard app and spend most of the time and money customizing it and waiting on budgets and vendors to do it each cycle, or you compose an app by reusing proven business capabilities your teams created or wrapped from the outside when using a modern development platform.

How OutSystems can help

OutSystems is a high-performance low-code platform that provides a level of abstraction throughout the entire development lifecycle, allowing organizations to accelerate development exponentially. From development through visual programming to the full CI/CD cycle through built-in tools that unify software development and operations with automation and monitoring.

In addition to that, OutSystems also promotes reusability and modularity, supporting the principles of a composable business.

Let’s see these capabilities in action.

Real-world examples

Humana, an OutSystems customer in the US, is a great story of an organization that has invested in composing its solutions and how that allowed them to adapt faster when the pandemic hit. The insurance provider used OutSystems to invest in a modular architecture that allowed Humana to reuse the same modules it had created for a Pharmacy Finder app and quickly launch a COVID-19 Testing Locator App for its customers.

Another great story is Green Cargo.

The logistics company needed to modernize its core system, which was sclerotic with legacy and SAP dependencies. But replacing the whole thing at once would have taken years, during which the benefits to the business would have stood still.

So the company decided to use the OutSystems low-code platform to replace functionalities one at a time. In just one year, the company launched several significant applications into production, including a mobile app, a predictive maintenance app, and a customer portal.

Building at the speed of buying

The build or buy dilemma has evolved over the last few years: buying off-the-shelf isn’t entirely totally off-the-shelf anymore, and the more digital we become, the less off-the-shelf it is.

As for build, the idea that developing software is costly and inefficient is based on old development models. Modern app development technologies, like OutSystems high-performance low-code, have changed that.

As Paulo Rosado, OutSystems CEO once said,

“Only the businesses that overcome these outdated ideas and take ownership of their software innovation will come out ahead in this increasingly digital age.”

To learn more about how OutSystems can help you accelerate development and support your digital strategy, schedule a demo.