The pendulum has long swung between “buy” and “build” in IT, but in the complex worlds of infrastructure and transaction visibility, the business case for do-it-yourself solutions has become much harder to justify. As network analytics become critical for optimising business performance, the challenge for organisations is surfacing the right data to the right people at the right time. It demands layers of expertise that are not easily acquired.
Corvil has been operating at the leading edge of network analytics and business visibility for nearly two decades, working with global organisations that depend on optimised infrastructure for business advantage. We have built a solution that has been battle-tested by multiple organizations across diverse use cases and conditions. Every customer engagement is a journey of continual improvement, where the solutions we use to solve customer problems are subsequently incorporated into a knowledge pool that benefits other Corvil users.
Shouldering the burden and opportunity cost of trying to deliver these capabilities while obtaining the battle scars that fortified a solution like Corvil, can be an ambitious, albeit, questionable, undertaking. Here are some points for firms to consider when looking at the business case for buying versus building.
Steve Lazzo, Chief Technology Officer at Allston Trading said his company was acutely focused on evolving its trading technology to maintain a strong competitive advantage. “When assessing whether to build or buy tools for effective and efficient operations, Corvil proved a very compelling option for improving trading performance and lowering our OpEx,” he said. “Corvil helps us advance our strategic innovation plan by providing real-time visibility across our environment, enabling us to address issues before they cost us time and money, and by allowing us to determine where we get the best return on investment for development”.
Simply put, companies that divert time and resources away from their core business are less competitive. Interpreting and acting on the insights delivered by network analytics to improve competitiveness should be the priority focus versus the development effort required to build a robust network analytics platform. Leave that work to the company that ranks highest for business value delivery, because we will always do it better.
Many “build” business cases begin with an assumption that doing it yourself is cheaper, without considering the hidden or lifecycle costs. Think about the total cost of ownership that goes beyond the initial build and incorporates ongoing management, maintenance and refresh cycles. Add in support, training, potentially hundreds of protocol updates each year and these distractions from core business add up. Additionally, if you do build it yourself there is the risk that the development resources leave the firm and take their knowledge with them. Filling that gap is another cost to consider.
When tallying the ledger, don’t forget to add the opportunity costs of:
The number of business-critical decisions based on network analytics will only increase as businesses become more algorithmic and automated. At some point other teams and stakeholders will question the data quality, analysis results or the solution itself.
Consider the time, resources and risk that will be involved in defending a bespoke solution when this happens. After all, explaining to business executives, regulators, or customers why your code is producing inaccurate results that put the business at risk is never a pleasant conversation.
The situation is entirely different if you’re explaining how you will hold a solution provider accountable. Having an external partner with whom to share the risk can be very powerful. It also lowers those risks because the solution is battle-tested by multiple organizations across diverse use cases and conditions.
The right pre-built solution delivers more value, more rapidly. The time it takes to build a solution cuts into the value achievable within the first 12 months. Consider the following thought exercise, assuming the projected benefits of a fully deployed solution are $12M in cost reduction per year (i.e. $1M every month).
If a do-it-yourself project takes nine months to develop, test and deploy, then the maximum value you can attain during that first year is $3M (i.e. $1M x 3 months).
On the other hand, consider a pre-built solution that deploys within days or even months with Installation Assurance and Dashboard Realization programs. The maximum attainable value during the first year would be $10M.
Most decision-makers would jump at the chance to get that extra $7M of value during the first year. And we haven’t even considered the full opportunity cost of diverting developers away from core business projects.
Realistically, many bespoke monitoring solutions are standing still when it comes to delivering new capabilities. Most in-house business development efforts are driven by the excitement of building something new, not by the necessity of completing “maintenance sprints” every so often. The result is a classic downward spiral, bespoke solutions that crumble because of lack of maintenance aren’t prioritized for innovation, which leads to more decline, and ultimately ends in the the realm of shelfware or retirement.
To expand upon the value extracted from the richness that is network data, there must be people dedicated to:
The competitive benefit comes in being more efficient, in innovating ways to utilize the analytics in a custom way for your specific business, and in delivering value sooner.
Weighing the buy versus build argument on a point-by-point basis doesn’t really do justice to the bigger benefits of engaging with Corvil. The continuous innovation we bring to product, the pioneering work we are doing around machine learning and predictive alerting, comes from a total commitment to network analytics that would be unreasonable to expect from internal resources. Quite simply, it is our core business and becoming the de facto standard for one of the most demanding set of businesses, didn’t happen by accident (or without a few scars along the way).