Archive for February, 2013

Build, Buy or Rent?

Whenever you look at making a change in a business environment, you have to consider three things:

  1. What do you want to change?
  2. Why do you want to change it?
  3. How are you going to change it?

The first two Рwhat and why Рare the areas where most people focus a majority of their effort. This is the strategy and should have a good amount of consideration. The issue arises when all of your effort is focused on these areas and not on the how. Unless you can translate your concepts into action, what you want to do and why you want to do it are useless.

So what is the best way to turn strategy into action? Break down the how into three paths:  build, buy, or rent.

  1. Build?
    • Approval – Very low, could even be “under the radar” until a key milestone is hit. The financial cost is minimal since it mostly human capital.
    • Getting it off the ground – Quick. Since approval is low you just need to focus on convincing people to work with you on the project.
    • Efficiency – Unfortunately, this is generally low. Resources are usually generalists, requirements are usually not completely thought out, and often other priorities within the team trump the project the longer it lasts.
    • Effectiveness – Generally the results of a build are low. More often than not, you end up with a finished product that looks very different from the original strategy. However, this is 100% dependent on the team. If you have rockstars, then you are one of the lucky ones.
  2. Buy?
    • Approval – Very high, because you are spending actual money. More money, more people involved.
    • Getting it off the ground – Very slow. This is completely dependent on your ability to sell internally. You need to sell people on scoping the requirements and sell people on the money it will take to meet those requirements.
    • Efficiency – Medium. This is dependent on your ability to know what you really want and finding the right vendor / solution to do it for you. Project management skills are a must here.
    • Effectiveness – Medium. You will find yourself bending your requirements to fit the abilities of the solution, not the other way around. However, if you pick a best-in-class solution it actually might help you identify requirements you never even considered.
  3. Rent?
    • Approval – Medium, because you are spending actual money (not as much as buy) and you are probably getting multiple people involved as well.
    • Getting it off the ground – Very fast. Payments in this category are generally spread out over months, quarters, or years. SaaS has really pushed the speed limits here and opt-out clauses are becoming more and more acceptable to execs.
    • Efficiency – High. Rent options are generally based on best practices and designed for quick(er) implementation. You probably get 80% of what you need “out of the box” and the other 20% is up to you and your team.
    • Effectiveness – Medium. Similar to the buy option, you will find yourself bending your requirements to fit the abilities of the solution, not the other way around.

So what does all of this mean? It means there is no one right answer. Consider the break down above for approvals, getting it off the ground, efficiency, and effectiveness. Figuring out what is the priority is much more likely to help move your strategy into action.

 

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