When a distributor is investing in a technology refresh there is often an early decision to make – do we build one ourselves, get a specialist 3rd party to build it, buy a existing package or customise an existing package. Clearly budget comes into the decision process but even some fairly small organisations opt to build their own solutions – why with so many established solutions on the market does this decision persist?
Well I hear a number of reasons used : “My sales processes are unique”; “The solutions on the market are over engineered”, “My Point of sale technology is my differentiator so it has to be different from everyone else”, “I don’t trust the suppliers”, “I don’t want to be held to ransom by suppliers for updates and changes”, “I want be able to change things quickly in response to market trends”. Ultimately it’s about control.
Control is a valid reason but the decision to go it alone needs to be made carefully. Many, many, many companies have tried to build their own solutionss and found it creates a monster which grows and grows within its own organisation. More and more demands for certain functionality comes in and more and more resource is required, costs escalate and as technology changes the solution can’t keep up and falls further and further behind the competitors’ systems.
Of course the choice is more complicated than simply build or buy – you can build the solution in-house or get a third party to build it; you can buy a pure package, or buy a package and tailor it; you can buy a package which comes with a toolkit to maintain it, or you can buy a set of functional components and glue them together. Which one is best depends on your organisation but decision can be boiled down to control (over functionality, architecture, suppliers) vs cost.
The diagram here positions the different approaches against the dimensions of cost and control. The eventual position of any option will depend on the effectiveness of both the distributor and the supplier but a range of likely relative positions are shown.
The pure package is suitable for some but typically those with constrained budgets. A package that the supplier configures on behalf of the client provides an element of control but the costs of doing so – especially with on-going maintenance makes this a brave choice. However where the supplier provides a toolkit to the distributer providing the choice of self configuration the level of control increases often with only minimum or no overhead. This level of control may still not be sufficient for some larger organisations where the choice becomes largely one of self build, build from a set of 3rd party components or getting a 3rd party to build. While this route gives greater control it is high cost and the success is dependent on ensuring the right skills are on the project to help avoid the pitfalls of many, many large projects from the past.
There is no right or wrong approach but distributors must go into the project understanding the issues with there approach and then they can manage them and enjoy the undeniable business benefits of a good system implementation.
