Did you know that identical twins – born with the same DNA – grow genetically apart, and end up with wholly different genomes as they age? This phenomenon, called epigenetics, concerns how genes express themselves as they’re exposed to environmental factors, stress, diet, culture, etc. This discovery is spurring a new era in precision medicine, in which doctors can tailor treatments that target our highly individual genetic and epigenetic profiles.
IT organizations are like the human body: Both are complex interconnected systems. And just like the human body, no two enterprises are alike. Even IT organizations with similar DNA – say, predominantly “SAP shops” with the same core ERP systems, or banks whose operations have relied on CICS mainframes for decades – will evolve differently, resulting in divergent org structures and staffing, network configurations, cultures and business priorities.
So with all these differences, why do technology providers continue to treat their customers with broad strokes, or by size and industry? It’s time for a more precise prescription: IT and technology vendors need to move beyond the old “build vs. buy” paradigm, and tailor their offerings to more effectively and efficiently solve customers’ greatest business challenges.
Software Ate the World, and We all Suffered Heartburn
In a 2011 Wall Street Journal op-ed, Marc Andreessen famously wrote, “Software is eating the world.” And the next few years proved him right, with massive market disruptions: Uber and Lyft “ate” the taxi industry (with auto and trucking next); Airbnb ate hospitality; Quicken ate mortgage lending. Start-ups outmaneuvered the big guys with on-demand infrastructures and intuitive user experiences. With the commoditization of web hosting and data storage, building and scaling no longer required massive investment. Incumbents wrung their hands as, for the first time, start-ups out-ran them, without the traditional requisite assets of money and a captive customer base.
Large enterprises scrambled to act like start-ups. They saw Etsy set the bar by upgrading its website functionality more than 50 times per day. Tesla behaved more like a software company than a car manufacturer.
But these more agile companies had a real advantage over their larger and more established counterparts: They could construct themselves this way from the ground up. They could take full advantage of the rise of Agile, Lean, design-thinking principles, as well as digital engineering approaches, enabling them to fail fast.
The incumbents, meanwhile, continue to face challenges akin to retrofitting an aircraft carrier to perform like a Biscayne Bay cigarette boat amid dire predictions that 50% of today’s S&P 500 companies will be replaced in 10 years.
Technology May Be the Answer, But Only If You Ask the Right Question
As an industry, we don’t always do the best job helping to address these issues with actionable guidance that transcends piecemeal selling; it’s easier to recommend a pharmaceutical than it is to create and manage a holistic health and nutrition plan.
A better approach would be to ask the right question to begin with: What are your basics? Put another way (as popularized in the book Good to Great), what is your hedgehog – the thing in which your company is uniquely best and your people most passionate? Only when you know that should you shift to the question of build vs. buy. And here’s the news: Build vs. buy is a continuum, not a binary choice.
The ideal evaluation – the one that starts to look like precision medicine – is a combination of looking outside-in (where is the destination?) and inside-out (what do I have in place?). In other words, examine the nature of the problem you’re trying to solve to understand the role of the application you’re evaluating in relation to your businesses strategy. Then take a close look at yourself: What talent do you have in house? What is your understanding of the problem and of the technologies required to solve it? If what you need to create or fix is germane to the care and feeding of your hedgehog, prioritize your time, money and talent accordingly.
And there’s another level of detail to consider: What are all the options available to solve the problem? And, what changes are required in business processes to make the most of a technology investment?
For instance, the organization that fosters well-documented processes backed by strong rules engines may earn faster ROI on automation purchases. But if the decision-making culture puts a premium on individual judgment or is more art than science, with variance as the norm, workflow automation may only address a small percentage of cases. That organization might be best served starting with an audit of past decisions to identify commonalities that can be applied to a wider swath of cases, before technology even comes into play.
The Evolution of Build vs. Buy
The options have become more complex as the vendor landscape has matured. It’s not just SaaS vs. on-premise; it’s in-house management vs. BPaaS. It’s not custom dev vs. outsourced; it’s also open source vs. proprietary code libraries, monolith vs. microservices. So what’s the right precision prescription?
Consider two axes of evaluation: from custom to one-size-fits-all, and from do-it-yourself to fully outsourced. Where you land depends on your investment profile/budget, risk tolerance, skills pool and strategic priorities.
Enterprise, Heal Thyself
Increasingly medicine is personalized to suit the profile of the patient. Enterprise technology should entertain the same metaphor, realizing that one organization’s game-changing software investment is another’s expensive shelfware, and some companies differentiate on product quality while others may need to preserve margins to win as a price leader.
While enterprises are being pushed, at an existential level, to modernize to compete, it isn’t easy to understand what to prioritize, the impact of investments and the true costs of doing so, and not just in terms of money. But in this complexity lies great flexibility and choice.
The embarrassment of riches that is today’s IT vendor landscape is a boon. Market “white space” for technology vendors is increasingly hard to find. For instance, there are over 1,000 fintechs and nearly 5,000 marketing technology providers. Therefore, enterprises can likely find a product, a partner or both to solve any problem. The time has never been better to write your own precision prescription.