build or buy ?
DESCRIPTION
Most organizations underestimate the cost and lost opportunities when they embark on a strategy to build applications rather look at COTS or SAAS solutions. They fail to take into account the other significant hidden costs and impact a decision to build has on the business. The attached presentation of mine attempts to highlight the benefits of COTS and SAAS offerings.TRANSCRIPT
Build or Buy?
Ambareesh Kulkarni
2014
Commercial Of the Shelf (COTS) Costs Less
Compared to Custom apps. , COTS is far more cost-effective
Cost less to developPre-built features speed implementation
Cost less to deployScalability enables more economical infrastructure
Cost less to maintainReact quickly to change and growth
Deliver higher business valueRobust features & more useful information
Maximize business benefitsGreater adoption from better performance, reliability and usability
QA
Build often Seems Like an Obvious Solution
Not too much, given the requirements
What would be the cost of developing the app in-house?
IIS servers, MSSQL databases
What IT infrastructure do we have in-house?
.Net developersWhat IT skills do we
currently have in-house?
Is it feasible to develop the application in-house?
Yes, the requirements appear fairly simple
NoIs there an existing product that
achieves what users need?
Opportunity Costs in Custom Dev
Issues Associated Opportunity Costs
Slower time-to-marketLower revenues, higher expenses, poorer
customer service, reduced business benefits
Lack of functionality Loss of employees, customers and partners
Performance and
reliability problems
Lost revenues, opportunities
and productivity
Growth demands
Unpredictable reliability and
costs as system scales to
meet increasing user
demands
Risk Management: COTS vs. Custom
Custom Coding COTS
Time to DeploymentAs much as 5 times longer
development cycles
80% fewer person-days in
development means faster
deployment
MaintainabilityCost of maintaining a custom
application
Easy to add and change when
business and technology
environments change
Scalability – volumeUnknown and difficult to predict
scaling properties
Scalable architecture requires far less
systems investment
Scalability –
application complexity
Increasing difficulty and cost to
maintain complexity growth
No limits to complexity –
start simple, grow with needs
ReliabilityThorough testing requires huge
investment of time and capital
Tested internally and by thousands of
customers every minute of every day
RiskHigh risk inherent in custom
development
Scalable, reliable server-centric
platform with pre-built features that
reduce project risk
SUMMARY
COTS Costs Less Than Custom
Compared to Custom applications, COTS Solutions are far more cost-effective
Cost less to developPre-built features speed deployment
Cost less to deployScalability enables more economical infrastructure
Cost less to maintainReact quickly to change and growth
Deliver higher business valueRobust features
Maximize business benefitsGreater adoption from better performance, reliability and usability
SUMMARY
Development Timeline For Custom Apps.
RequirementsGathering
COTS
Gather requirements on core functionality
Focus on gathering requirements
Prototype deployment, not functionality
Prototype only what can be coded
Focus on rapid implementation
Develop core capabilities before focusing on user requirements
Prototyping Deployment
RequirementsGathering
Prototyping Development
TIME
Maintenance Timeline For Apps
Development
COTS
Upgrades/ Enhancements
Create new functionality, change existing functionality, and re-test every modification
Maint.
Maintenance
TIME
Development
Opportunity Costs in Custom Apps
Issues Associated Opportunity Costs
Slower time-to-marketLower revenues, higher expenses, poorer
customer service, reduced business benefits
Lack of functionality Loss of employees, customers and partners
Performance and
reliability problems
Lost revenues, opportunities
and productivity
Growth demands
Unpredictable reliability and
costs as system scales to
meet increasing user
demands
SUMMARY