Case study Buy versus Build

CASE STUDY: Build Versus Buy Software Solution Client Background: The client is a online marketing agency which provides a bouquet of solutions to its clients including PPC programs, e-mail marketing programs, online reputation management programs . Client Problem: Client wanted to build its presence if affiliate marketing space, and build up its own solution in the affiliate marketing space, they approached us to help them build an affiliate marketing solution. Biznotek Interpretation of the problem: It is a classical problem when a non technology company wants to build a strong technology back end to power its business, so should it build a solution in house or try to find a off the shelf solution to power its business . Biznotek framework for build versus buy decisions : 5 Questions you should ask before you go any further: 1. Is your core business technology driven or technology enabled. 2. What is the current state of technology team you have . 3. What is your Time to Market 4. What is the maturity Index of the vendor with respect to the capability you are trying to build 5. How much money you have in the wallet. General framework for comparing White label/packaged solution with Custom solution White label/Packaged Solution Custom Solution • Cheaper • More attuned to your business • Better quality software as it s a needs tried and tested solution • Higher control Benefits • Customizable • Scalability will be better. • SAAS based models allow you to pay as you go up Risks • Vendor Risk ( Vendor goes Bust) • Economics • Licensing cost /Monthly fixed • Development Costs SAAS cost • Operations costs( you have to • Infrastructure costs maintain a separate team. • Variable costs data transfer, • Testing costs network usage costs • Training costs • Support costs • Maintenance costs • Training costs • Infrastrucutre costs Copyright 2010 Biznotek.

Based on this hypothesis Biznotek arrived at the following broad parameters for deciding whether to buy or build When to build When to Buy • When you strategic business requirements • When off the shelf solution provides you demand that you own the ip and have very a strong technology backend which specialized requirements. integrates seamless with your business strategy. • When you have demonstrated capability of • When off the shelf gives robust set of building applications, capabilities in terms features , which can be scalable as per of technology resources, and experience in your business requirements building and maintaining complex • Support an SLA requirements cater to your applications. business requirements • Cost in terms of fixed and variable • When economics is in your favour i.e. the expenditures are in line with your financial cost of building a solution ( calculated over requirements the life time) is lower than the cost of • Vendors are matured in the space white label or a stand alone software . • The solution caters to your non- core business requirements • When you have some legacy systems , • It allows you to cut time to market and get which cannot be easily integrated with off ahead on the competitive curve the shelf solution ( but do look at the sunk cost scenario when you are doing this analysis ) Conclusion: Finally the client decided to go with the Biznotek recommendation of using a White label solution, please note that as stressed earlier this is not a generic solution, the decision has to be driven by parameters above, taking into consideration your business requirements. For understanding how we can help your business take that decision please write to us on biznotek@gmail.com , you can also ping us on twitter our twitter handle is @biznotek Copyright 2010 Biznotek.

Case study Buy versus Build

by biznotek on Oct 18, 2010

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Case study Buy versus Build — Document Transcript