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Buy Versus Build Why Companies Should Never Build Software
Introduction <ul><li>Corporate America spends more than $275 billion covering about 250,000 in-house application software ...
Project Definitions <ul><li>Successful Projects  – The project is completed on time and on budget, with all features and f...
Project Resolution History Source: The Standish Group. Used by permission.
Overruns and Deficiencies Note: All figures are for projects that are either challenged or out-right failures except for ‘...
Success by Project Size Source: The Standish Group. Used by permission.
Project Duration, Team Size Affect Project Success Source: The Standish Group. Used by permission. 0% +36 +500 Over $10M 8...
Buy or Build? Never  build.  Always  buy.
Recommendations When Buying Software <ul><li>Buy a mature application that has been on the market for at least three years...
Why? “ Unless you are operating a software company, software should not be central to the way you view your business. It’s...
Sources <ul><li>Inc Magazine –  What’s Next: Software for Non-Dummies  by Robert X. Cringely </li></ul><ul><ul><li>www.inc...
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Buy Versus Build: Why Companies Should Never Build Software Presentation

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Buy Versus Build: Why Companies Should Never Build Software Presentation

  1. 1. Buy Versus Build Why Companies Should Never Build Software
  2. 2. Introduction <ul><li>Corporate America spends more than $275 billion covering about 250,000 in-house application software development projects </li></ul><ul><li>Unfortunately, this is an area of business where success is rare and failure is the norm </li></ul>
  3. 3. Project Definitions <ul><li>Successful Projects – The project is completed on time and on budget, with all features and functions as originally specified. </li></ul><ul><li>Challenged Projects – The project is completed and operational, but over-budget, over the time estimate and with fewer features and functions than initially specified. </li></ul><ul><li>Failed Projects – The project is cancelled before completion. </li></ul>
  4. 4. Project Resolution History Source: The Standish Group. Used by permission.
  5. 5. Overruns and Deficiencies Note: All figures are for projects that are either challenged or out-right failures except for ‘Content Deficiencies’, which only include figures from projects that are considered challenged. 26% 239% 214% Small 35% 202% 182% Medium 58% 230% 178% Large Content Deficiencies Time Overruns Cost Overruns Company Size
  6. 6. Success by Project Size Source: The Standish Group. Used by permission.
  7. 7. Project Duration, Team Size Affect Project Success Source: The Standish Group. Used by permission. 0% +36 +500 Over $10M 8% +24 +250 $6M to $10M 15% 18 40 $3M to $6M 25% 12 25 $1.5M to $3M 33% 9 12 $750K to $1.5M 55% 6 6 Less than $750K Success Rate Time (months) People Project Size
  8. 8. Buy or Build? Never build. Always buy.
  9. 9. Recommendations When Buying Software <ul><li>Buy a mature application that has been on the market for at least three years and adapt it to your purpose, running it on equipment you already own </li></ul><ul><li>Never buy a 1.0 or even 2.0 version if at all possible </li></ul><ul><li>The name of the vendor doesn’t matter as long as its been on the market 3 years and has significant market share </li></ul><ul><li>If off-the-shelf applications still won’t work, consider outsourcing, especially Web-based applications suites </li></ul>
  10. 10. Why? “ Unless you are operating a software company, software should not be central to the way you view your business. It’s just a means to an end. And to be classed as truly successful, the means should be quietly efficient and as close to invisible as you can get.” -Robert X. Cringely in Inc Magazine, February 2003
  11. 11. Sources <ul><li>Inc Magazine – What’s Next: Software for Non-Dummies by Robert X. Cringely </li></ul><ul><ul><li>www.inc.com/magazine/20030201/25103-print.html </li></ul></ul><ul><li>The Standish Group – The CHAOS Report (1994) </li></ul><ul><ul><li>www.standishgroup.com/sample_research/chaos_1994_2.php </li></ul></ul><ul><li>The Standish Group – The CHAOS Report (1998) </li></ul><ul><ul><li>www.standishgroup.com </li></ul></ul>

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