Deciding whether to build software products in-house or buy them from third-party vendors is one of the hardest decisions engineering leadership must make. In most cases, it’s not even a single decision — it’s a strategic decision-making process that must be carried out for every supporting feature and technology in the engineering workflow.
That’s because almost any software product or feature you can dream of is available as a service in today’s cloud-native technology environment. Vendors spend a great deal of time and money on marketing campaigns designed to tell you their product is worth it.
Sometimes it is. There are also cases when developing in-house capabilities is the better choice, and great leaders distinguish themselves by differentiating between the two.
Making the right decision every time isn’t easy, but it’s vital for guaranteeing long-term engineering efficiency. This is especially true for resource-constrained organizations that can’t afford to make mistakes.
Deciding whether to build software functionalities in-house or outsource them to a vendor is not just an operational decision. It is a representation of the organization’s high-level strategy that can have far-reaching consequences.
This makes it a strategic decision, like the choice to expand to a new market or restructure the organization. As with other high-impact strategic decisions, the specifics are important. It’s not simply a matter of always building or always buying — you will have to examine each opportunity on a case-by-case basis.
This means asking some tough questions about your in-house capabilities:
You also need to understand the capabilities that external partners can offer. In-depth vendor evaluation and selection is important, even if you believe that building your own solution will probably be the best path. If you don’t gather comprehensive information on what vendors have to offer, you won’t be able to make an accurate comparison.
You’ll have to make this decision for many different steps in the engineering process. In many cases, greatest benefits come from building your core functionalities in-house and buying supporting technologies from external partners.
For example, if your engineering team’s greatest strength is a technical skill like object-oriented design or cloud infrastructure provisioning, building your own support technology for measuring engineering performance may not make sense. Instead of drawing valuable employee hours away from your core proficiency, you might consider deploying a ready-made engineering management intelligence platform and measurement solution like Waydev.
Building your own software capabilities in-house allows you to carefully map project outcomes to your requirements. However, it can also become a significant drain on limited in-house resources. This is especially true of projects that aren’t a core value for the organization, but still require significant input from developers.
Dragging developers away from value-generating workflows comes with risks. Employee satisfaction is highest when team members are assigned to tasks that match their competencies. Performance and efficiency can suffer when limited resources are spent on in-house projects outside the organization’s core values.
Your organization does not have an unlimited amount of engineering talent on hand. Projects that require hard-to-find specialist talent may come with additional opportunity costs. Security is a common example because most organizations can’t afford to take security team members away from their daily responsibilities.
These problems can draw engineering talent away from your core value-generating processes. The less time you spend on those core processes, the less efficient your team becomes overall. An engineering team that builds its own in-house solutions may spread itself too thin, and risk not achieving its most important strategic goals.
No modern technology product generates value in a vacuum. Your organization’s core value relies on a large number of supporting technologies. Vertically integrating all support needs into the main organization only makes sense for the largest enterprises on the planet — and even then, it doesn’t always work out.
Great engineering leadership means knowing the difference between vertical integration and reinventing the wheel.
When it comes to software products and features outside your organization’s core competencies, buying external solutions often provides the greatest value. It can dramatically reduce inefficiency by freeing up your internal team to spend more time on the high-impact strategic tasks it knows best.
Here are some of the main benefits your organization can leverage by deploying supporting technologies from reputable third-party partners:
In this scenario, context is key to successful strategic decision-making. The better you know your organization’s core value proposition, the easier it is to choose between building and buying technology products and capabilities. That’s why so many organizations partner with managed service providers for things as varied as security, infrastructure support, data analysis, and more.
Your choice to build or buy can influence the strategic value of the entire organization. It directly impacts its ability to produce valuable software solutions while directly influencing the core values those solutions represent.
Waydev enables software engineering leaders to optimize their team’s performance, granting visibility into how engineering resources are allocated without relying on time-intensive manual processes. Discover how Waydev can help you accelerate development processes, implement DORA metrics, & SPACE Framework, & accurately measure Cycle Time.
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