Build or buy: eight criteria, scored on your own case

Uniqueness of the process

BuildSuits a process that differs from rivals'

BuySuits a process rivals share

Time before people use it

BuildFirst module in months, then more modules

BuyWeeks, once the product fits

Fit as you change

BuildChanged by editing your own system

BuyChanged by configuring, or by waiting for the vendor

Cost shape

BuildSpent early, then hosting and upkeep

BuySpent steadily, often by seat and by renewal

Who fixes a fault

BuildYou, or the team you contract

BuyThe vendor, on the vendor's plan

Ownership

BuildCode and data model in your repository

BuyLicence to use; vendor holds the code

Number of users

BuildCost does not rise with logins

BuyCost usually rises with logins

What happens at the edges

BuildScope can grow past what users adopt

BuyTeams build workarounds in spreadsheets

Add up each option over the years you expect to use it.

1. For a purchase: licence fees for the users you expect each year, renewals, the integration work, and the time your team spends on workarounds.
2. For a build: discovery, the build, hosting, upkeep and the people who own it after launch.
3. Compare the totals at three, five and ten years. A build costs more in year one. Licence fees rise as headcount grows.

Brihat's rule of thumb for ERP: a system with about 100 users running ten years tends to favour building; 20 users for three years tends to favour buying. It is an estimate drawn from Brihat's own projects, not a published study.

Buy when:

• the function is the same for every company in your sector
• work is blocked today and a close-enough product frees it
• no one in your company will own the system's direction after launch
• the number of users stays low, so licence fees never reach a build cost

Build when:

• how you do the work is what customers or regulators notice
• two products have been bought before and both were worked around
• the value lies in connecting systems that no vendor sells as a single product
• the system will live long enough that a build costs less than ten years of licences

A packaged product with light configuration is a fair purchase. If you expect to customise heavily, price a build alongside the purchase.

A Protiviti India survey of more than 600 Indian executives found that 85% prefer an iterative pilot, learn and scale approach to a big-bang rollout. The same applies here. Buy first to learn what your process needs, or build the one module that hurts most and add the rest once it is running. Before putting data into any product, confirm you can take it out.