Build vs. Buy

I was reminded today about one of the key decisions a CIO must make when evaluating new applications - build vs. buy. Building a custom application is time consuming, costly, risky, and often painful. However, sometimes it does make sense.

The key to the decision lies in the business strategy and the key differentiators for the business. Jim Collins, in his book "Good to Great," talks about the hedgehog concept - the idea that a company should focus all resources on the areas where they excel. This includes IT resources.

If the business has found a way to perform a particular function in a unique manner that provides competitive advantage - then it would be hard to find a pre-built solution that you can buy to automate this function. This is the area where it's worth building a custom solution and maintaining that competitive advantage.

However, other areas of the business that do not directly contribute to a unique differentiator should easily be satisfied with off-the-shelf solutions.

The bottom line: Invest in the aspects of the business that set you apart from the pack and don't worry about using standard common tools for those aspects that don't.