Build vs Buy: How to Decide
The build vs buy decision — whether to develop software internally or purchase an existing solution — is one of the most consequential choices in technology strategy. The wrong decision wastes years of engineering effort on commodity capabilities or ties the organisation to an inflexible vendor solution that doesn't fit the business.
When to Buy
- The capability is not a source of competitive advantage — commodity functions (payroll, expense management, basic CRM) should almost always be purchased
- Good solutions exist in the market that meet 80%+ of requirements
- The build cost (including maintenance and opportunity cost) exceeds the buy cost over a realistic period
- Speed matters — buying is typically much faster than building
When to Build
- The capability is a genuine competitive differentiator — the secret sauce that makes the product better than alternatives
- No existing solution fits the requirement adequately and customisation would be as expensive as building
- The organisation has the engineering capacity to build and maintain the solution sustainably
- Data and process requirements cannot be satisfied by available products
The Hidden Costs of Both Decisions
Building: development time, ongoing maintenance, technical debt accumulation, opportunity cost (what else could the team be building?). Buying: licence costs, integration effort, vendor lock-in risk, customisation limitations, data portability concerns. Total cost of ownership must include all these factors — not just the initial implementation cost.