Build Vs. Buy: A Dangerous Lie - InformationWeek

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1/31/2014
09:06 AM
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Build Vs. Buy: A Dangerous Lie

IT's eternal debate sidesteps the complexities of a fragile talent ecosystem and creates a vicious cycle that ensures project failure.

There are no good "buy" options. Period. I'm not saying there aren't any good products out there. There are. But given the complexities of fluid business conditions and the peculiarities of the internal processes that support them, the term "off the shelf" is a marketing gimmick.

"Buy" is never just "buy." It's actually "integrate." So is "build," which means they both require similarly skilled engineering talent. Therein lies the dilemma.

Culturally the word "buy" in large IT shops is a not-so-subtle signal of disinvestment in a declining, increasingly commoditized function/department/division. In a field that has grown sensitive to short cycles of obsolescence, that signal creates a powerful, self-perpetuating downward spiral for top engineering talent -- an exodus of ambitious hackers, ever-vigilant about remaining relevant.

The space in decline experiences the opposite of gentrification. The allure of someone else's "build culture" sucks out all the talent that matters, leaving behind non-technical project managers (the overzealous and process-focused) and technical order-takers (under-motivated second- and third-tier engineers). In the Mortal Kombat vernacular, that combo leads to a fatality because that diminished internal team simply can't deliver what the business thinks it's getting "off a shelf."

[Don't get too comfortable in middle management -- instead, flatten the org. Read Career Advice From The Future.]

Note that I can't stand those three words: off the shelf. They're classic marketing misdirection, implying, "What could be simpler? You have a can opener, right? Well, we sell cans!" Mmmm… deeeelish!

The problem, of course, is that the flight of engineering talent from your "buy" organization means that you don't have a can opener. If you're lucky, you have a hammer, and it's somewhere out in Chennai. Most orgs-in-decline don't even have that. They just have to learn to eat the can.

Enter senior management
The decline plays out predictably. That ripe smell of flop sweat, even before the buy engagement starts, causes senior management to overcompensate and hire an army of external professional servicers. But it's already too late because the home team is no longer strong enough to support those occupying forces.

Ever-diligent about project optics (and their own career paths), senior management pivots and starts talking about the need for talent upgrades. Hilarities ensue, because it was their framing of the space as a commodity function that essentially caused its accelerated decline -- a self-fulfilling prophecy.

And that is why the perennial build-versus-buy discussions are so dangerous. Sunsets lead to darkness faster and more chaotically than anyone expects.

The counterargument -- because it's all really about talent, not whether you build or buy -- is that your best people should focus on your company's core competency, the areas that differentiate your product or service. But putting your top talent exclusively on strategic competencies means that they're being supported by your middlers and low performers, essentially giving your gladiators paper swords.

A good example -- for which I'm sure I'll get hate mail -- is Human Resources IT. How can I say this politely? The market isn't flooded with world-class engineering talent with a depth of HR IT experience. Management's default buy options, i.e., PeopleSoft/Taleo, guarantee that this space remains IT's talent backwater. This is ridiculous (this is me backpedaling) given the role that talent plays in the success of every business.

If you want a larger, divisional example, think about the credit crisis. Over the last five years, Big (in its many shapes and forms) finally figured out that its home loan units are money pits. Most of the IT shops that support them have intentionally and systematically phased out builds in favor of buys. Is it an overstatement to say that no self-respecting engineer aspires to work in mortgage tech? Just slightly.

If you thought your home purchasing experience was bad before 2007, you obviously haven't bought a home recently. I have, and being a good corporate citizen, I used Big. I'm not making this up. I had to apologize to my mother for how badly she was treated. My mother! Yes, I'm equating that experience with the quality of technology delivered in those shops.

What departments (and divisions) fail to understand is that on top of all the talent issues, buying off-the-shelf software means that their business processes have to be re-engineered to align with their buy's available features. Tail wagging dog, and ultimately more disruptive and expensive.

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RobPreston
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RobPreston,
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2/7/2014 | 9:42:06 AM
Re: Go ahead, buy it
So you're saying that most IT organizations are support and procurement organizations--they offer their companies no competitive advantage? Sounds like those kinds of organizations are prime outsourcing fodder...classic cost centers.
RobPreston
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RobPreston,
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2/7/2014 | 9:09:15 AM
Re: Go ahead, buy it
That analogy doesn't hold up under scrutiny. It's apples and oranges. Consumers and businesses. We buy cars as consumers rather than build them because we don't have the capability to build them (for the most part) at anywhere near the sophistication and cost. We build applications and systems as businesses to gain a competitive advantage. You're not flushing money down the toilet if your company can develop an application or build a system that truly separates your company in the marketplace. No, we don't want to build PCs and email systems ourselves. But not every IT asset is a commodity.  
 
ChrisMurphy
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ChrisMurphy,
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1/31/2014 | 3:22:18 PM
Mobile
I've seen a number of companies look at this "build" question anew around mobile -- there was no off the shelf "buy" option for the app they wanted to do, so it came down to build in house or outsource for the development. A number of companies that had been doing in-house build work found they could shift their dev talent to mobile with just a bit of specialized outsourced resources, but others had to go entirely outsourced app dev. For the all-outsourced crowd, as those mobile apps became a critical customer-facing platform, they had to hire a team capable of supporting and refining that mobile app.
Lorna Garey
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Lorna Garey,
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1/31/2014 | 10:27:18 AM
Just ask the end users
You know, the ones curled under their desks in a fetal position after spending a few hours in Kronos.
RobPreston
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RobPreston,
User Rank: Author
1/31/2014 | 10:21:51 AM
Does everyone need to build?
So what do you make of the movement to cloud services, Coverlet? Are IT organizations further ceding their "build" chops and becoming mere service brokers and integrators? The Facebooks and the Goldman Sachs's of the world can afford the internal engineering talent for a range of applications and infrastructure that yield competitive advantage, but not every company is in that position. 
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