Build It or Buy It? What’s The Right Solution for YOUR Company?

Posted by Chuck Kocher
On December 28, 2015

Build-it-or-buy-it?Very few businesses today are completely self-sufficient. Most of us need the products or services or expertise of someone else in order to function.

Still, there’s a temptation for many companies to try to do everything themselves. For some companies there’s a sense that no one else can create exactly what they want to their exact specifications. Others may have fears that if they let “outsiders” in they will lose control of the process—or that there will be the potential for leaks of information. And for some, there’s a (sometimes misplaced) sense of pride in producing something that is 100 percent theirs.

Sometimes the issue is a technology one. Other times it’s a manufacturing consideration (the need for a specific part). Regardless of the situation, the question facing many businesses is whether they should build it or buy it. How do you decide what ‘s best for your company?

One thing that can help you make this important decision is to take a close look at your core competencies. Is the essential component you’re considering something that fits your “wheelhouse” or is it outside your area of competency?

This is something that the leadership team has to assess. It’s a great exercise—not just for an individual component for something you’re creating—but also for making sure your company stays focused on what it does best.

Have each member of your leadership team come up with five potential core competencies. These are things your company does with excellence on a regular basis. They are things that don’t require re-tooling or new education. The results meet your standards for excellence. Then have team members share what they think are your company’s core competencies and discuss these as a team. The goal is to arrive at five (or so) core competencies that you all agree on.

Then, when a situation arises where you need a new component, part, technology, or whatever, you can evaluate whether it falls into one of your areas of core competency. Again, you’ll want to determine if this something you can do well; do without re-tooling; do without major retraining; do in time to meet your schedule; and (above all) will give you the result we want and need.

Sometimes the answer is to do it in house. Sometimes the answer is to buy the service or the part in order to get the best result. Going through this exercise can help you make that determination.