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Build versus buy analysis in System Architecture

Often, a "buy before build" approach is considered while defining the architecture of a system. However, in some cases, building a solution can be important. Both approaches have their advantages and disadvantages.

Factors to Consider in a Build vs. Buy Decision

A decision analysis method, such as Decision Analysis and Resolution (DAR), can help evaluate build versus buy options. The factors considered depend on an organization's requirements, strategy, vision, and specific context.

Key Factors for Analysis

  • Total cost of ownership (TCO): Build vs. buy cost over the software/system lifecycle

  • Return on investment (ROI)

  • Budget constraints

  • Time to market

  • Keeping pace with technology changes

  • Maintenance and support considerations (cost, resources, reliability, risks)

  • Availability of a Commercial Off-The-Shelf (COTS) solution (pros and cons)

  • Utilization of resources

  • Number of skilled resources available in the organization

  • Technology expertise within the organization (can internal resources be reskilled?)

  • Development platform compatibility with available resources

COTS Vendor Selection Criteria

When considering a COTS solution, evaluating vendors against key criteria is crucial:

  • Functionality fit: Does the COTS fulfill all business requirements?

  • Customization:

    • Can it be customized?

    • To what extent can it be modified?

  • Upgrades & Enhancements:

    • How frequently does the vendor provide updates?

    • What are the costs associated with upgrades, enhancements, and support?

  • Product Quality & Vendor Reputation:

    • Has the vendor delivered quality products in the past?

    • References in the market (who else uses it, feedback from existing customers)

  • Business Process Impact:

    • Will it require changes in business processes?

    • Will users need specific training?

    • Ease of adoption for users (interface, usability, learning curve)

Advantages and Disadvantages

Building a Custom Solution

Advantages

  • Tailored to specific business needs

  • Lower initial investment

  • Can be supported internally

  • Quick enhancements and fixes

  • Full control over updates and enhancements

  • Competitive advantage through custom development

  • Easier integration with existing systems

Disadvantages

  • High cost of changes

  • Higher overall cost (design, build, test, change, etc.)

  • Risk of knowledge loss if key resources leave

  • Resource management challenges

  • Higher initial investment in development and testing

  • If IT is not the company’s core business, managing software can be difficult

Buying a COTS Solution

Advantages

  • Ready-to-use functionality

  • Faster time to market

  • Cost benefits due to economies of scale

  • IT expertise from dedicated vendors

  • Reduced dependency on internal resources for support

  • Cost-effective changes and enhancements due to a larger customer base

  • Follows industry best practices and standards

  • Competitive market drives lower costs and better support

Disadvantages

  • May lack specific functionality or require process adjustments

  • Higher initial investment

  • Reinvestment required as versions become outdated

  • Licensing models may not align with organizational needs

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