Top 5 Decision Criteria for Build versus Outsource

Jan 17, 2011

When we meet with companies, the discussion of build versus outsource often arises.  This is because many times we are replacing a legacy B2B system or helping a customer consolidate multiple B2B integration solutions that are on-premise and managed in-house.  Typically, the management overhead, ongoing infrastructure costs, and overall complexity of the B2B business process leads the company to look for a service provider like Hubspan.

As a cloud-based platform delivered as a service, Hubspan removes the complexity, cost and hardware & software from the B2B implementation, while allowing companies to maintain existing work flow, business rules and visibility.

Several CIOs I've spoken with have developed criteria for their companies when evaluating whether to build or outsource.  Most of these IT executives also use this criteria as part of their evaluation of cloud computing platforms or solutions.  From these ideas and other best practices, I've compiled five top decision criteria. While these were developed with B2B integration in mind, I believe they are applicable to nearly any solution. 

The Top 5 Build versus Outsource Criteria

1.  Core Competence:  Does your internal IT team have the skills and expertise to build, implement and manage B2B integration?  Chances are you have staff who are highly knowledgable about applications, database administration and network security, but not necessarily integration.  Evaluate the costs around training and ongoing management by your internal team.

2.  Time to Market:  How quickly do you need to implement the integration processes?  And how many customers, partners, or suppliers need to be integrated within that timeframe. If you have over six months and only a few companies to integrate, you may be able to manage it in-house. However, if the business requires fast integration due to market demands, and you have dozens or hundreds of companies to integrate, having a integration services firm handle the on-boarding, implementation, mapping and other areas may be the best solution. 

3.  Business Impact:  Is there revenue at stake with this integration.  For example, if you need to integrate a set of customers, and if you don’t do it well or fast enough, your company could lose those customers or future revenue? If you don’t integrate a set of suppliers the right way, could a product be delayed?  Make sure your IT team is fully aligned with the business requirements and understand the full impact to the business. 

4.  Security and Compliance:  Evaluate your current security and compliance requirements and whether or not they can be maintained if you outsource. What data would be involved in the integration process and does protection of this data impact your compliance to key regulations?  Can the vendor provide the right level of data protection and encryption you need?  By doing the integration yourself, you will be able to fully control the security parameters; however, many vendors provide best-in-class security that you could leverage cost-effectively. 

5.  Budget Implications:  Do you have a clear budget for integration?  Also, is the line of business willing to share the cost of integration with you?If your capital expenditure budget is already completely allocated, outsourcing the integration to a qualified cloud vendor that enables you to leverage an operational expenditure may be your only choice.  Outsourcing may also give you the option of only paying for what you need, and starting small and then growing your integration community over time, rather than paying for everything upfront.


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