BD #29 - Buy, Build, Partner Strategy for Data and Analytics
Making the decisions to buy a solution vs build your own
Buy, Build, Partner Strategy for Data and Analytics
Most people in these roles are passionate about technology, like solving complex problems, and want to build interesting things. This, however, can become a problem in certain circumstances. I've witnessed first-hand teams of genius-level folks from the world's best universities struggle to make an impact because they've been bogged down building things outside their expertise. If you aren't open to buying existing solutions or partnering with external organisations, you might just be wasting time and money. In this article, we're going to talk about your three options for getting things done: buy, build, partner and how to craft a strategy that makes sense for your goals.
Crafting a Buy, Build, Partner Framework for Data and Analytics
Before making any decision, it's essential to understand where your company stands concerning data and analytics. Here are some critical questions to consider:
What are the specific business needs or problems you want to solve?
Does the solution you're looking to build offer defensible IP or differentiation from your competitors? Or is it something everyone in your space is doing?
What happens if you get halfway through development and realise it's not achievable?
Do you have the necessary skills and resources to build your solution?
What are the risks and opportunities associated with each option?
What is your budget, and how much can you spend?
How much time have you got?
Answering these questions will help you determine which approach best fits your organisation.
When it comes to data and analytics, there are three main approaches that companies can take: buying a solution, building their own, or partnering with a third party. Each option has its pros and cons, and the decision ultimately depends on your organisation's unique needs and circumstances.
Buying a Solution
If your company is looking for a quick and easy solution, buying a data and analytics solution may be the way to go. Off-the-shelf products exist on the market that can help you meet your business needs. These solutions are typically easy to implement and require little to no customisation.
A lot of risk and investment is associated with building a product - spreading that risk and cost across multiple organisations allows vendors to deliver more fully featured and robust solutions than the typical in-house team can deliver.
However, buying a solution can be expensive in the long run or, as you scanl, and you may end up paying for features you don't need or suffer from vendor lock-in if acquiring more complex platforms. Additionally, you may be limited by the functionality and features of the product you choose.
Building Your Own Solution
If your company has the necessary skills and resources, building your own data and analytics solution can be a great option. This approach allows you to create a solution that is tailored to your specific business needs and deliver exactly what you need for your use case.
If successful, this can lead to defensible intellectual property and differentiate you from your competitors.
However, building your solution takes time and effort. You must invest in the necessary infrastructure and talent to develop and maintain the solution. Additionally, you may encounter unforeseen challenges and roadblocks along the way. There is significant risk in building solutions from scratch or configuring them from existing components, and it isn't easy to appreciate the entire development cost up front.
Partnering with a Third Party
If your company has limited resources or expertise in data and analytics or you want to bring in niche skillsets, partnering with a third party may be the best option. This approach allows you to leverage the expertise of a specialised parter while still maintaining control over your data and technology.
Partnering with a third party can be cost-effective, as you won't need to invest in the infrastructure and talent required to build your solution. Additionally, you can benefit from the vendor's experience and best practices - knowledge transfer to your organisation being a core benefit of this approach. Most consultancy agreements will also transfer all intellectual property rights to your organisation too.
However, partnering with a third party can also come with risks. You will need to ensure that the company is trustworthy and that its solutions and approaches meet your business needs. Additionally, managing partner engagements is a skill all of its own.
Ultimately, the decision to buy, build, or partner depends on your organisation's unique needs and circumstances. However, by answering the critical questions outlined above, you can make an informed decision that will help your company succeed in the world of data and analytics.
Feasibility and Company Fit
Now that you have identified your options for acquiring data and analytics capabilities, it's time to assess the feasibility and company fit of each option. This step is crucial to ensure that you make the right decision for your business.
Buying a solution can be a quick and straightforward way to acquire the capabilities you need. Off-the-shelf solutions are readily available, and you can start using them almost immediately. You don't have to worry about managing the project delivery (although, for some complex systems, there might be a significant onboarding and training requirement).
Building your own solution can be a great option if you have a team with the right skills and resources. You do need to be prepared for the twists and turns of custom delivery, ensuring you've accounted for testing and taking on the support and maintenance of anything you build. If you haven't got a strong track record of bespoke internal delivery, then your organisation may need to go through a few painful iterations before it finds its feet.
Partnering with a third party can be a viable option if you find the right fit with a good external organisation. This approach allows you to leverage the expertise and resources of a specialised provider. However, it can be challenging to find a partner that shares your vision and values and works well with your team and environment. You'll need to conduct thorough research and assess potential partners carefully.
When choosing a partner, it's essential to assess their skills, experience, and track record. You should look for a provider with a proven track record of delivering high-quality solutions, preferably in the same context you're operating in. Additionally, you should consider factors such as cultural fit, communication style, and pricing model. You don't want to get stuck managing a difficult partner relationship.
Overall, assessing each option's feasibility and company fit is crucial to ensure you make the right decision for your business. Take the time to evaluate each option carefully and consider all the relevant factors before making your final decision.
Choosing the right approach for acquiring data and analytics capabilities is a critical decision that can significantly impact your organisation's success. While buying, building, and partnering have benefits and drawbacks, the right choice will depend on your specific needs, resources, and goals. So take the time to assess your options, and don't be afraid to seek guidance from experts in the field.
All the best,