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. I recently had a revealing conversation with John Bratincevic, Senior Analyst at Forrester Research, about these exact trends (you can warp thru it at Build at the Speed of Buy webinar).

Based on trends we both saw in the past 18 months, we talked about how the “build” approach has been gaining momentum as technology evolves and new modern development approaches appear. So, where do we stand now? When should you buy and when should you build software?

 

Challenges of the Old “Buy + Customize” Approach

The traditional view we’ve always been told is 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”—or so you wish. You should only build when your business lives in a somewhat niche area of the market poorly served by package software.

But the truth is, every resilient business is kind of like a snowflake—there are no two 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 of prioritizing buying over building is that whenever you need to change operations, that software that you bought because it was “baked” for 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 acquired by each department to serve the majority of your software needs, you end up with several systems that don’t integrate seamlessly with each other. One nasty consequence is recurring to poor man integration with bots in what John describes as a “human API”, where users must manually copy-paste data, navigate between screens, and accruing all sorts of workarounds, like spreadsheets, to compensate for the lack of integration between the multiple solutions, all just to do what it was supposed to do!

In a surviving organization, software should be an extension of the business and express its DNA. To achieve that, companies need bespoke software solutions that may integrate all systems, and that means more development and faster delivery cadence.

Why Is “Building” Gaining Momentum?

Why is “building” the trend these past two years? What has changed in the business landscape for vanilla applications to not be enough? The answer is simple: post-pandemic of doing all customers' operations digitally, 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. Because those operations greatly affect the customer experiences. 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. Just imagine what the next unexpected pandemic may be! When you’re dealing with standard SaaS or COTS systems, even if they’re the best in class, they don’t change easily 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, be more painful and expensive to customize it 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 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 need to dive into the “start from scratch” development to build an application; they can take advantage of 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 the 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” anymore, 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 modern app development platform.

Adapting to Change with a Build Approach: Examples

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

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 your own software is costly and inefficient is based on old development models. Modern app development technologies have changed that.

As Paulo Rosado, OutSystems CEO said in a recent article,

“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 see my full conversation with John Bratincevic and learn more about how modern dev technologies can help you make your business future-proof, watch Build at the Speed of Buy: How Modern App Platforms Are Transforming Development Assumptions.