Existential crises and procurement: the real question behind build/buy/partner
Build vs buy debates are one of the few constants of life in banking IT.
Some people are card-carrying members of one side or the other: not-built-here syndrome sufferers forever pitted against the “we are slow, we are clunky, we think python is a snake, leave it to someone else” brigade.
Some others see no issue with leaving the calibration to the consultants doing the benchmarking and roadmap analysis for pretty much everything. Build or buy pros and cons, on a slide about ten from the back of a diabolically long pack, in a neat two by two grid. You know the type.
Partnering is a fairly new animal in the zoo. It mostly plays in its own space, leaving the big boys to do big boy stuff unperturbed although, increasingly, it is appearing in the traditional build vs buy discussions throwing the grid all out of kilter.
I don’t know if this way of making decisions was ever sound. Prevalence is no proof of usefulness and I am hard pressed to see merit in the approach but whatever your view was up until today, I say this approach is dead and anyone who continues to apply it will die with it. And the whole point of business is to keep delivering, keep changing, keep becoming what the clients want. The whole point of transformation is that, when the end happens, it happens to the competition and we are not there to see it.
What are you?
Existential questions make bankers extremely uncomfortable but at least we can afford therapists.
So before you engage in build or buy discussions, agree what you are. No shareholder statements or brand-aligned calls to arms. Explain what you are in terms of what you do that gets you paid in a way a 10 year old would understand. That is what you are now.
Next question: What do you want to be when you grow up?
Is it different to what you are now? There is no wrong answer, by the way.
What will clients pay for in this future of yours? What is it that you will be doing that they will be willing to continue or start paying for?
This is harder than you think, especially if your organisation has been in business for a few decades. But it’s necessary and when you have it, you have the answer to build, buy or partner, whatever context it comes up in, from now till the end of time.
Why are you?
To make money.
If you are a business and not a social entrepreneur, making money is key. To everything. Because if you don’t make money you won’t be around long enough to deliver against your purpose and vision, be it building affordable bicycles, creating experimental haircuts or delivering good software. If you don’t make money, the end will come for you fast.
So the aim is to do what you do in a way that the clients want to pay for.
It is not.
Because the customers keep changing, the market keeps shifting and the competition is constantly proliferating and evolving, sometimes getting on the right side of the art of the possible much faster than you.
Being in business is all about not getting to the end, about keeping yourself in the running and in a shifting landscape, and it is far from easy.
How are you?
That’s the key to answering the question build, buy or partner. And I don’t mean how are you oh very well thanks and you.
I mean in what manner do you exist, in your perpetual dance of getting paid to deliver against your business purpose.
Since you know what you are, and what you deliver, and what you get paid for, you should have a pretty good idea of how you deliver by now. So here’s your key:
For everything that is core to your identity, purpose and value exchange: build. For anything that helps you be, make, differentiate and sustain: build.
Don’t build alone, if you don’t know how.
But be part of the building, this is the core of your business, if you are absent and aloof while it is being built then the builders will know all that matters to your continued existence and when they walk that knowledge walks with them.
Guard your purpose.
For everything that is ancillary or auxiliary to your purpose, a nice-to-have in a rapidly evolving landscape that you appreciate but don’t fully understand, partner. Partner with people who do that thing that you are partnering on as their core. People who built for their purpose. Align on business models – if they make money by undercutting your price point these are not the droids you are looking for. Confirm you can play nice across the board, that you are not parasitic to each other. That your purpose dovetails and aligns with theirs. And then partner.
Learn, grow and deepen your relationships or move to other relationships that are a better fit for your changing market. This is not core. A happy customer is. Partners are travelling companions. Share, cooperate, support each other and if your roads diverge, part amicably and send postcards.
Along the way, as you build and partner, you will buy. A lot.
You will buy components, toolkits and plumbing supplies. Some of what you will buy will be specialist and complex and cost a lot. Contrary to established practice, the price tag doesn’t make stuff strategic, what you do with it does: and what you do with it is what your business will live and die by. It’s your core and purpose.
If you choose to outsource this or pursue it by partnership and delegation rather than hands-on involvement in the differentiator-building, you won’t pay the price immediately. You may even think you played a nifty trick on your competitors, by getting to market faster, cheaper.
But as the knowledge walks out the door, your core walks with them.
As partners see to their core, your purpose may be left behind.
And customers will shift without a second thought, to whatever business delivers what they are happy to pay for
So before the grid and the PowerPoint and the vendor selection, spend some time agreeing what is core and what is key to delivery, survival and business viability. If you don’t want to be there to see the end.
By Leda Glyptis
Leda Glyptis is FinTech Futures’ resident thought provocateur – she leads, writes on, lives and breathes transformation and digital disruption.
Leda is a lapsed academic and long-term resident of the banking ecosystem, inhabiting both start-ups and banks over the years. She is a roaming banker and all-weather geek.
All opinions are her own. You can’t have them – but you are welcome to debate and comment!