There is nothing new about the build vs buy debate – it has been going on for decades. There are pros and cons to both approaches. However, there’s also the hybrid approach, i.e. buying an off-the-shelf product and customising it, delivering, in many instances, the best of both worlds, writes Laurent de Barry, senior director, global head of solutions consulting at Exegy.
Building limitations
When it comes to building a technology stack, the idea of more control and the differentiation that provides may be tempting but, in reality, there are many challenges that come with this approach.
Both building and maintaining a complete technology stack has costs which are often overlooked, not just in financial terms, but also in time, expertise and ongoing support. Building reduces reliance on third parties but requires significantly more effort from in-house teams to ensure things run smoothly and needs endless maintenance.
It’s important to find a balance between being independent and utilising internal resources most efficiently when deciding whether to build or buy. In a constantly-evolving market there are plenty of opportunities for firms that can quickly adjust their trading strategies – the early bird gets the worm. A hybrid approach supports this and can increase profitability, allowing internal resources to be better allocated.
Challenges of buying
Purchasing technology can offer access to leading-edge, purpose-built products that are tried-and-tested. However, it can be a challenge finding a vendor that not only delivers the right product, but also one with whom you can work in real partnership, and who will continue to develop the product as the market evolves, whether through technological advances, regulatory changes or other market drivers. Some companies may be reluctant to share proprietary or sensitive information with external parties because of concerns about core strategies.
Buying off-the-shelf reduces the ability to customise the stack, and may not deliver exactly what is needed, which is why the hybrid approach is so beneficial: it allows a company to buy a product and tailor it. An additional benefit of the buying and hybrid models is that they are more likely to offer comprehensive 24/7 support.
Hybrid all the way: Touching on building, buying and blending
Historically, there has been a difference between buy/build in the world of hardware, but best practices in software are now coming to hardware development, where libraries of both standard and advanced functions are available. It’s possible to bridge the gap between hardware and software for FPGA solutions, for example, and combine the best of buying and building technology by adopting the hybrid approach.
We are now seeing more and more firms embracing the hybrid model: they buy the technology which most closely fits their needs and customise it. This can be very successful with the right external partner. The hybrid approach offers the opportunity to purchase a tried-and-tested product from a company with an established track record; because you’re building on top of proven technology, there’s no need to reinvent the wheel. Potentially, this can reduce time-to-market, at times from two to three years to a matter of months. Products can be tailored to meet specific needs and allow for flexibility as projects evolve. This also allows in-house teams to focus on other projects, which may be more profitable, or bring value to core business functions and focus on what sets the company apart.
Another benefit of the hybrid model is that it can dramatically reduce risks, as you’re implementing a product which is already in production, while also benefiting from built-in security features.
Ultimately, the decision of which option to choose will depend on numerous factors which will have to be weighed against each other to select the right approach, but hybrid may well offer the very best of both worlds.