February 11, 2004
Build it or Buy it?

Phil Windley talks about whether companies whould develop their own or outsource development for new business applications:

Company IT departments don't build general ledger packages anymore for a good reason: your accounting software won't add to your competitive advantage. We do, however, see organizations trying to significantly modify ERP systems to change how paydays are handled, etc. In Utah for example, we modified SAP's payroll system to handle a special way the Highway Patrol had of paying troopers because they couldn't be convinced to follow a standard business convention. The end result will be a system that's more prone to problems now and more expensive to upgrade later.

Of course, Utah isn't a business, but if it were, they'd be deriving no special competitive advantage from the way troopers receive their paycheck. These kinds of system should be bought and business processes should be changed to ensure that the system requires as few modifications as possible.

One tricky part, of course, is convincing people that the way they've done things could change to a more standard practice and it wouldn't hurt the business.

Posted by dcoates at February 11, 2004 02:20 PM