Build Versus Buy
The classic question that has challenged business organizations is whether to build applications in-house or to buy them as prepackaged software. This chapter will provide guidance on the appropriate steps to determine the right choice. Obviously the decisions can be complex and vary depending on the application, the generic nature of the application itself, and the time requirements to have a functional application to meet business needs. Build decisions are further complex in that they can be developed in-house or an outsource provider. Buying can also come with choices on the amount of custom modifications that are necessary—the general rule being that over 20 % modifications tend to be a bad choice for the buy equation. However, the advent of digital transformation is rapidly changing this balance. The inventory of sophisticated object-based products in an open-systems environment has become more and more appealing to organizations. We may be seeing a more rapid movement of firms that consider third-party products that needs to be integrated with in-house developed applications. The analyst will need to position their role to be the major driver of the decisions on how internal and external products operate together and evolve to meet market needs.
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