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07 Dec 2017 - Company by Neil Quin

Coming out on top of the build vs. buy software debate

The ‘build or buy’ debate is nearly as old as technology itself. Most companies have a combination of in-house systems and commercial software, and this is true across industries regardless the size of the business or how long a business has been operating. Making the decision to build or buy can be tricky and the answer is not always obvious.

Build or buy?

According to Gartner, “Ill-advised purchases, pet custom development, and inconsistent decision-making have contributed to technical debt.” Technical debt has the potential to affect your bottom line, deplete staff morale, and slow down your ability to scale your operation. So what should you consider when making the decision to build or buy?

Investing in your own technology

Making an investment in your own technology can make a lot of sense, especially if you have minimal requirements and already have an IT department. Building software requires long-term thinking, something that’s often missed when systems start out small to solve an immediate problem. When you develop your brief to build a bespoke data management system, consider these questions:

  • Is this a short-term fix or a long-term solution?
  • If this is a long-term solution, are you able to scale at the same pace as your business grows?
  • Can you insulate your project from other business needs so it doesn’t become overtaken in importance or bogged down?
  • Have you considered the time, effort, focus and cost of building and maintaining your own technology?
  • How will this technology leverage on innovation and align with third-party technologies?
  • How will your technology feature in your company’s future IT strategy and/or system landscape?

If you plan to build or borrow your technology from open source, human resources are another consideration you need to make.

Getting (and keeping) the right people

One thing to keep in mind is that the true cost of employment is usually about 1.4 times the base salary you pay when you take into account leave, employment taxes and fringe benefits. Salaries for experienced software developers run into six figures all over the world, especially when a person possesses niche skills. The software industry, as a whole, is transient and has been for decades. With skills in short supply and high demand, it’s hard to keep people in one place.

So what should you consider when making the decision to buy?

Things to consider before purchasing software

Not all solutions are equal and not every vendor is right for you. So what are the criteria to consider when choosing a partner for a geoscientific information management (GIM) solution? The software industry is rife with companies whose goal is to build and flip. If you’re in business for the long-term, ensure your vendor is too.

  • Think about the longevity of the company you want to partner with. How long have they been around? Has the technology or company been bought out or sold off, and has this affected the technology roadmap?
  • How much industry experience does the company have? Vendors who have been in the industry for many years have probably faced and overcome many challenges with different businesses.
  • Has your vendor of choice taken steps to avoid technical debt for their own products? Are they in an active phase of technical rejuvenation? If they’re a new company, are you confident they can keep pace over time?
  • Do you understand the true impact of customisation versus configuration, and how much customisation are you prepared to accept without compromising your long-term solution?
  • How much ownership or influence can you have on the scalability and growth of the solution in your business?

Advice on the ‘build vs. buy’ debate at Austmine 2017

Peter Cunningham of Teck Resources, Canada’s largest diversified mining company, spoke about choosing the right technology partner at the Austmine 2017 Conference earlier this year. He said you should always remember:

  • A partner offering a great platform can evolve into something you never imagined possible.
  • Commercial software helps reduce the time needed for future innovations.
  • It’s only worth investing if it makes your business more agile.
  • Find a specialist in data, especially geological data, because that allows your partner to help you quicker.

Luke Davey from Snowden also commented reasons to use a vendor in terms of helping build innovation in your company. He observed that miners have struggled to exploit emerging technologies for real business benefit for a variety of reasons. Innovation outcomes are hard to quantify from the outset and the benefits are not always obvious. Sometimes there’s not a direct link you can point to.

While he agrees poor data is better than no data at all, he’s also a proponent for the benefits of finding technology partners to complement your business and plug the holes where you’re missing expertise. Building internal capability is a slow strategy, so investing in a commercial solution and partnering with the right vendor is a good way to keep your operation in a perpetual state of innovation.

Now what?

If you’d like to partner with a vendor who understands mining, is continually enhancing their product and is good at partnering with clients, acQuire has over 21 years’ experience in GIM. Contact us to discuss how we can partner with you.

About the Author
Neil Quin

Neil Quin is the Global Manager for Business Development at acQuire. He has over 9 years’ experience in Mining and Exploration technologies and leads acQuire’s business development team delivering high quality GIM solutions for the natural resources industry.

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