Gartner Research

Decision Point for the Build vs. Buy Software Sourcing Decision

Published: 03 July 2012

ID: G00235090

Analyst(s): Anne Thomas, Richard Watson

Summary

Every organization has a perceived software buy-versus-build policy. But one policy cannot fit all situations, and more nuanced options are available, such as borrow (open-source software [OSS]) or rent (software as a service [SaaS]). Ill-advised purchases, pet custom development, and inconsistent decision making have contributed to technical debt. What constitutes a consistent set of evaluation criteria to remove biases from the decision? This Decision Point provides guidelines for organizations that are sourcing software so that they can make form-factor decisions that match their architecture principles, requirements, and constraints.

Table Of Contents

Decision Point

Decision Context

  • Business Scenario
    • Supporting Business Strategies
  • Architectural Context
    • Timing Is Everything
    • Systems Thinking Required
    • All Build or Buy Decisions Require Brokering
  • Related Decisions
  • Decision Assumptions

Evaluation Criteria

  • Requirements and Constraints
    • Software Type
    • Resource Constraints
    • Strategic Sourcing Considerations
    • Technical Architecture Requirements
    • Financial Considerations
    • Risk Management
  • Principles

Alternatives

  • Custom-Developed Software (Build)
    • Summary of Advantages and Disadvantages of CDS
    • Support for Evaluation Criteria
  • Open-Source Software (Borrow)
    • Summary of Advantages and Disadvantages of OSS
    • Support for Evaluation Criteria
  • Commercial Off-the-Shelf Software (Buy)
    • COTS Upgrade Cycles
    • Summary of Advantages and Disadvantages of COTS Software
    • Support for Evaluation Criteria
  • Software as a Service (Rent)
    • Summary of Advantages and Disadvantages of SaaS
    • Support for Evaluation Criteria
  • Comparing Form-Factor Examples
  • Comparing and Contrasting Alternatives

Future Developments

  • Trend for ISVs to Move Toward SaaS Delivery Model
  • Relieving Demand Pressure with Shadow IT
  • Emergence of New Custom Development Sourcing Models
  • Application Delivery Trends
  • Custom Development Productivity

Decision Tool

  • Software Type Decision Tool
  • Form-Factor Decision Tool
    • Form-Factor Assessment Scores
    • Individual Score Sheets and Explanations
    • Alternative Assessment Tool
    • Gap Analysis

Decision Justification

  • Use CDS (Build)
  • Use OSS (Borrow)
  • Use COTS Software (Buy)
  • Use SaaS (Rent)

Recommended Reading

Notes

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