Decisions for a Digital World – Build, Buy or Partner?
Senior executives and boards are demanding top-line revenue growth. They insist on leveraging innovative and emerging technologies to monetize data and information to attract and serve their customers more effectively. Software is now becoming the product. But as I’ve previously written on the subject, legacy organizational approaches are hindering the ability to tap into this emerging business model.
Most companies today face a rapidly expanding gap between the demand for agile software application development and their ability to execute on that software development internally. The greatest proportion of technical resources in many organizations today is aligned to supporting ongoing operations and maintaining the base of existing applications. Senior executives and boards are searching for new revenue streams found in the digital landscape, while also demanding that existing revenue streams be protected and maximized.
Coupled with the pace at which web and mobile technology is evolving, this creates the need for innovation with unprecedented time-to-market requirements. Taking advantage of social, local and mobile application integration and analytics further complicates the challenge. How best can organizations overcome the innovation and execution challenges they face?
Organizations typically evaluate how to accomplish new software product development against a Build, Buy, or Partner option analysis. Due to all the challenges listed above combined with a “we need it yesterday” mentality, I believe the Build, Buy, or Partner decision is no longer so clear cut or mutually exclusive.
Organizations can no longer tackle the innovation and execution challenge on their own. The reality today is companies aren’t able to locate and hire all the deep technical resources they need to adequately staff internal projects. And even if they could, disruptive variables like talent attrition and technology shifts hinder the ability to execute and achieve strategic objectives. In order to meet the time-to-revenue requirements of the digital marketplace, organizations are best served by adopting a dual Build and Partner product development strategy.
By going with a Build and Partner approach organizations can simultaneously leverage the best of both worlds to meet their goals. Build and Partner doesn’t imply that the organization gives up the idea, the intellectual property or the innovation. Rather, it allows them to capitalize on the idea, develop the intellectual property, and speed their innovation. To successfully build through partnership, companies must select a partner that brings these key attributes to the relationship:
- Product Mindset - The product development partner must possess a strong product mindset. Insight into what customers want today and will want in the future must be aligned with the intersection of trends, current technology, delivery gaps and business process to generate desired revenue outcomes. Product mindset includes a lifecycle approach to product development, working towards long-term sustainability.
- Thought Leadership - The successful partner will be thought leaders, taking a strong position on your product strategy and positively impact your product strategy beyond technology and methodology.
- Emerging Technology - Your product development partner must have deep expertise in emerging technologies, but additionally be able to speak your business. Only those partners that can work at the intersection of business and technology can best serve your needs.
Finding a partner that can deliver all three attributes puts a company in a strong position to keep pace with the blinding speed of business change today. For the most part, companies that try to go it alone will likely suffer from reduced revenues and lost market share.