Regular readers of this blog will be familiar with an IT term raised often here – ‘build or buy’.
‘Build or buy’ is a term used commonly in large organisations when considering options for their new technology systems.
‘Build’ refers to the notion of ‘building’ a software system from the ground up, in other words, software developers designing, planning and developing a new custom built system for the unique needs of their organisation.
A famous example of this in Melbourne is the Myki system, where (rightly or wrongly) it was decided to build a completely new public transport ticketing system rather than simply install one of the hundreds of similar systems around the world.
Whilst Melbourne commuters are now apparently warming to Myki, it wasn’t until over a billion dollars of taxpayers funds were spent on its lengthy design, planning, development, trial and eventual deployment.
The alternative to Myki would have been what is known to IT departments as the ‘buy’ option. They simply purchase the system that best fits the technical requirements of the ticketing system.
Benefits of ‘buying’
Whilst ‘built’ systems allow you to operate a system that meets the organisation’s specific technology requirements, they are very labour intensive, not only for the initial build but for their ongoing maintenance and operation.
This ongoing cost can mount substantially over the years, particularly when underlying technologies or delivery platforms change.
A good example of this is websites that must constantly be kept up to date with the changing technical specifications of web browsers like Explorer, Chrome and so on.
Of course, sometimes (and this is what Melbourne’s then public transport authority would have argued) there simply isn’t a system on the market that meets the exact requirements of the organisation.
So in this case the only realistic option (providing sufficient funds can be sourced for both build and maintenance aspects of the system) is to ‘build’.
In the small business sector, there are few occasions where a system has to be built from the ground up. The exception is where the technology is that organisation’s ‘core business’ or at least core differentiator – the business simply can’t exist without the development of the system in question.
And so it is with website systems or platforms.
Why reinvent the wheel?
These days, the vast bulk of the requirements of a smaller business have already been ‘built’. And because software is easily and cheaply (actually zero cost unless a massive system) duplicated, smart technology vendors make these systems available to new customers at a fraction of the cost of developing them.
I often cite bookkeeping software MYOB as a great example of this. Why go to the considerable trouble and expense of developing a bookkeeping system when MYOB and its ilk already have more features than you are ever likely to use?
As a result, there are now hundreds of website systems or platforms on the market that don’t require a single ‘line of code’ built for them and that design and content can be added to easily.
The rented alternative
But for some time now, the notion of ‘renting’ systems has become a very viable third alternative to the build or buy mainstays.
Originally called ‘Application Service Providers’ during the dot com boom, this business model has become known as Software as a Service (Saas).
This ongoing payment model replaces both the expensive website development path and removes hefty upfront charges of the ‘buy’ model – though there are usually charges for the creative and content development components of your website.
Most of these SaaS systems are bundled with hosting, representing an easy and convenient alternative to build or buy.
Very importantly they are bundled with ongoing improvements and upgrades, meaning their customers never have to face this technical minefield for themselves.
Traps for new players
Unfortunately, as described here last week, less scrupulous web professionals try to convince business operators that the ongoing charge is simply inflated hosting which is a complete fabrication.
Some too, offer their website technology platforms for ‘nothing’. Whilst there are some very basic platforms that might suffice for the smallest business, with most you get what you pay for and usually have to fork out for maintenance, hosting or upgrades down the track.
Still, for as little as $15 a month including hosting, smaller businesses can get a very serviceable basic platform.
Just be sure that the system in question doesn’t contain any nasty surprises when you are ready to move it to the next level of your requirements.
In addition to being a leading eBusiness educator, Craig Reardon is the founder and director of independent web services firm The E Team, which was established to address the special website and web marketing needs of SMEs.