By Barry Padgett, CEO, Amperity, shortlisted for Best Data-Driven SaaS Product at 2022 SaaS Awards
Enterprises face a difficult dilemma when deciding how to solve business and IT challenges. Is it better to build proprietary solutions for their problems, or buy an off-the-shelf product/service to save time and focus instead on core business objectives? While businesses have long wrestled with whether to develop in-house solutions or rely on third-party service providers, the debate has become more pronounced with the recent explosion of hyperspecific, cloud-based software services.
Proponents of building your own solution argue that you’ll never reach the results you truly want with an off-the-shelf tool. Advocates of buying a niche solution believe that it’s not worth the time and effort needed to build something that already exists on the market.
This is often painted as black and white — you either buy the tool or you don’t. However, the best long-term solution may be to find middle ground, choosing off-the-shelf tools and platforms that empower you to tailor things according to your needs. No business in 2022 is building every single one of its technology and software solutions, so what are the thresholds for a company to decide to license some tools but not others? How should a company decide when their build should turn into a buy?
The DIY folly: Losing sight of strengths
When a large enterprise brand looks at why they might be missing revenue or profitability goals, a common problem is that they’ve moved away from their strengths and are focusing too much on trying to build solutions outside of their core competency. This is the DIY folly: investing valuable time, talent and resources trying to address problems that don’t have anything to do with a brand’s unique selling point.
With new software solutions emerging to solve challenges ranging from customer relationship management (CRM) to auditing and compliance to data analysis to sales commission management, it’s clear that businesses are facing a complex technology environment.
When an organization makes choices on how to integrate and manage new technology solutions, those decisions have an immediate impact on every other aspect of the business. If a sales leader is suddenly responsible for helping to develop a new tool for automating sales commissions, their attention will be pulled away from what they do best — attracting and converting new customers.
There are only a finite number of hours in a day. Internal resources can rarely dedicate the time needed to fully oversee a new technology project. As a result, they will either underserve the new initiative, leading to delayed timelines and poor results, or they will neglect their day-to-day work, causing a ripple effect throughout the organization
Brands need to ask: What are we here for?
Surprisingly, it appears that firms in select core business areas have already absorbed the lessons of the DIY folly. Twenty years ago, the customer relationship management (CRM) industry was defined by proprietary patchwork solutions as businesses attempted to construct platforms tailored to their individual requirements. Today, it’s difficult to picture life without Salesforce – a ready-to-use CRM solution that has grown ubiquitous. A CIO would be thrown out of the boardroom if he proposed constructing a new CRM platform from scratch in 2022. However, the same debate occurs surrounding functions such as data gathering, monitoring, and HR services, with completely different outcomes.
A customer-centric corporation must ask itself one question: Why are we here? If the solution is to sell jeans to persons aged 18 to 34, should they really be investing hundreds of thousands of dollars in developing their own software solutions? If a corporation is the best in the world at making and marketing athletic goods, why would they want to develop their own data warehouse? Organizations that focus on their core mission and outsource the rest will be able to provide excellent client experiences while also maximizing their financial results.
The DIY software question
While it is obvious that developing a new solution might be time-consuming, it is also reasonable why major organizations are hesitant to apply what appears to them to be a one-size-fits-all answer to their specific difficulties. An off-the-shelf product must be scalable and adaptable to the needs of a certain company; otherwise, the frustration of a tool that only gets 90% of the way there may be worse than having no solution at all.
In software development, many engineering teams have turned to microservices in order to simplify and streamline their operations. A company’s tech stack could include hundreds of microservices dedicated to performing a hyper-specific function, freeing developers to focus entirely on developing new solutions that drive top-line growth. In the case of brands and retailers, a similar approach would allow them to invest more in sales, marketing and product development — the activities that give them their essence and identity.
Facing the possibility of a down economy, businesses cannot justify the massive expenses of a DIY software project — particularly when they can buy an affordable option that solves most of their problems. The key to covering the last mile of the challenge is choosing products that are flexible enough to adapt to an organization’s specific needs. If you buy a suit jacket that’s two sizes too small, no amount of tailoring can make that a good fashion choice. But if you buy a jacket with slightly long sleeves that otherwise looks good, a few small adjustments will turn it into a perfect fit.
The build vs. buy binary doesn’t fit the needs of an agile, fast-growth business. Committing to a comprehensive DIY strategy obscures the fact that build vs. buy is now a spectrum. As companies build complex tech and software stacks from dozens of individual solutions, even the process of choosing which tools to use represents a form of building.
In order to achieve the simplicity of buying with the tailored results of building, enterprises must look for vendors that are flexible enough to work with each individual vision. With the right combination of carefully-tweaked, off-the-shelf solutions, any company can build a tailored, highly effective tech stack without the dramatic costs of a DIY strategy. Build or buy? Why not both?