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insight Encyclopedia

Build v. Buy

When faced with the need to embed analytics into an application, most software providers arrive at the crossroads of the “build versus buy” decision. The first step in tackling this question is to understand your requirements. Determine your desired end-user functionality, prioritize your needs, and then evaluate the feasibility of building such capabilities.

In order to properly evaluate your implementation options, it is important to qualitatively – if not quantitatively – assess the benefits and costs of each option, as well as compare the ROI for each. Your analysis should also include the opportunity cost and project risk associated with your skilled development staff spending less or more time focusing on your core product. By building a cost-benefit analysis over time, you can calculate the ROI for each buy or build option.

To some, “build” may seem like the obvious choice for embedding analytics functionality in their application. However, even if it looks like the less costly option from the investment standpoint, it may not be the most worthwhile option. Compared to coding on your own, utilizing a third-party product may increase your cost in software licensing, but it also reduces your cost of development, both initially and ongoing.

Definitive guide to analytics