Build or Buy—The Perennial Question

Recently I’ve run into a couple of examples of an issue that seems much more common for internal creative services organizations than for independent agencies. The issue is, once the need for a software solution to help manage your projects is identified, should you purchase off-the-shelf software or develop a solution in-house that is unique to your organization? This usually isn’t a question for an agency since they don’t have the internal resources to develop a solution. But, if you are a creative services organization in a large corporation, it’s very likely the corporate IT department is very capable of building software solutions from scratch. Often this alternative is proposed, even if you have identified some potential off-the-shelf solutions.

In either case, let’s assume you have looked at your processes and developed a good set of functional requirements. Then the question is, which approach will be “better, cheaper, faster?”

Let’s go in reverse order. Is it faster to buy or build? Certainly it can take some time to implement an off-the-shelf solution—maybe up to a year depending on complexity. In my experience, that’s a fraction of the time to build a comparable system from scratch. The shortest implementation time will be for a packaged, configurable solution with no customization and limited integration with other corporate systems. If integration is required, that will add some time, but most systems are built with integration in mind.

How about cost? A truly comprehensive marketing management system for the enterprise could cost $1,000,000. Of course the range of solutions is large and it all depends on the functionality you need. But when you consider what it costs to develop and maintain a solution internally, with the same functionality, it would be rare for the internal solution to cost less than three times that of the packaged solution. The main reason is pretty obvious. The packaged solution is from a company that does this for a business and spreads its development costs over all its customers. For the internal solution you get to pay for 100% of the development costs. (Not to mention the support, improvement and implementation costs.)

So, in the end, which system is ‘better’? Well that’s a more difficult question. The easiest way to answer it is to look at how truly unique your requirements are. If you are acting much like an internal agency, with common business processes, then your requirements may fit quite well with the functionality provided by off-the-shelf solutions. In fact, those solutions my incorporate some best practices that could actually improve the way your organization functions. On the other hand, if you truly have unique requirements that cannot be met by off-the-shelf systems without significant customization, then you may need to consider building a solution to meet your unique requirements. Or, if most of your requirements fit pretty well with off-the-shelf functionality, but you have some specific functional capabilities that are unique to your corporation, you may want to consider having IT build a software module that can be integrated with the packaged solution in order to meet all the requirements. That’s not the same as customizing the packaged solution, which is usually a poor approach, requiring significant ongoing effort, particularly as the packaged solution delivers new versions of software. Or, maybe worst case, they rewrite their solution on a more up-to-date platform and all the customization has to be redone. Now that can be expensive!

So, what’s the right answer? Usually, it’s to identify the correct off-the-shelf system that is supported by a good software development company and best fits your requirements. If you’d like assistance determining the best solution for your organization, Cella can help.

For additional thoughts on this topic, check out these blogs:

We still have seats available at our Northern New Jersey (June 7th) and Philadelphia (June 8th) CreativeExecs Roundtables; we’ll be discussing “affecting client behaviors.” Learn more, including how to reserve your seat, at http://www.cellaconsulting.com/CreativeExecsNetwork/CreativeExecs_Roundtables/.

Les Johnson , a Cella consultant, has nine years of experience providing technical solutions and process improvement in the Creative Services environment. Les is a certified Six Sigma Black Belt and provides process analysis and improvement services to clients. These services include process mapping, improvement activities and recommendations for process changes to improve efficiencies and reduce costs.

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