Build or Buy?

Date Posted on 5th Oct 2016 in Blog

The battle between building in-house solution and outsourcing has been live ever since the new-age technologies are born. Here, is what today’s CIO should know when he is thinking about a mobility solution

Digitisation affects almost everything in today’s life. This shift made companies in rethinking the way they work in their day-to-day operations and think about solutions that help them in streamline processes, increase efficiency and cut costs. But what’s making today’s CIO’s rethink is whether to buy the solution or build it in-house. In today’s data-driven world, the real call lies in knowing if building a mobility solution in-house helps in accelerating the growth or deploying a solution would be better.

In today’s world where IT is a strategic tool to increase the productivity & efficiency, it is high time for CIO’s to evaluate the solution that would help people evaluate a solution.

Here is an analysis that might help you understand if it is better to build a software in-house or outsource it.

Dedicated Resources Team:

Having a dedicated resource team is crucial when a major hassle in your operations effects the entire operations. It’s highly imperative to have an excellent infrastructure and a well-defined process. But the question that lies ahead is, whether to hire a team internally or outsource it?

A dedicated resource works 8 hours a day, 5 days a week which brings it to 160 hours per month. Being a global company, it is highly important to ensure that the operations are not affected even by at least 5 minutes. And, 24*7 support is essential for organisations to ensure smooth flow of operations. It helps in overcoming daunting change management challenges, especially in preparing the IT department for disruptive change.

If we scale the total project cost to 100, managing a team itself occupies 40% of the project cost which excludes training on upcoming technologies and advancements.  

Visibility of users, devices and applications for planning & troubleshooting is very important and to do this, a dedicated resources team is essential.

Technological Volatility:

Because of relative immaturity, the risk of technology obsolescence and volatility is high in the enterprise mobility market. Shorter technology refresh cycles due to rapid advances in mobile technologies, device capabilities, feature sets, operating systems and application software are big barriers for organisations looking to invest in enterprise mobility solutions. Adding to the risk of technological volatility are challenges such as a fragmented mobile technology. Market with software interoperability issues and still evolving nature of mobile standards.

 

According to Gartner, the rate at which the technology is changing has increased rapidly and so the requirements. In 2016, CIO’s are investing on Big Data Analytics, Cloud & Mobile technologies.

Integrating devices with Enterprise Information Systems:

Enterprise information systems have both operational (transaction processing) and informational (data storage, retrieval and reporting) functions. It is obvious that operational goals tend to be focussed on efficiency. And in many organisation, more than 31% systems are integrating with other systems. A limited amount of control the integration developers typically have over the participating applications.

Scalability:

In an ever changing business environment, scalability is essential in administrative, functional and geographic fronts. The application architecture must accommodate an increasing number of licensed users-on-demand. Managing & budgeting a growing number of licensed devices is a definite challenge that organisations have to be ready.  Front-end application functionality must be easily adaptable to include new features because of used demand.

Customisation/ Configuration:

Usually, SaaS/PaaS/IaaS products can be updated without a user even seeing that in-house products need reinstallation and possible customizations when it comes to new features etc. With data being critical, configuration issues might cause huge loss of data. Customization can be costly and can complicate future upgrades to the software because the code changes/modifications may not easily migrate to the new version.

Operational Expenditure:

The major part of the costs in-house is related to the OpEx aspect running the system, making sure servers, devices and all another part of the infrastructure are up and running in-house solutions costs (50-80%) of total costs. The maintenance of the environment includes all equipment, backup servers, storage, network connections, software updates, administrative tools and support for internal resources and typically varies between 5-15% of total costs. The purpose of maintenance is just to make sure the work, development, and testing, can process smoothly without any interruptions.

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Companies that digitise their processes can improve their bottom lines by deploying a solution that would unlock the potential of their employees by helping them seamlessly share, create & collaborate resulting in happier, more productive employees. 

Want to do a cost-analysis on your company's spend and evaluate best returns? Contact our consultant here: svk@getfareye.com







 



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