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Arctec Views March 27, 2004 In this issue: * Finding the Buy/Build Balance * Enterprise Architecture News * Arctec Group News: Arctec PlansArchitecture
Roundtable Session ************************************* Arctec Group is an architectural services company focused on
providing objective and pragmatic Enterprise Architecture advice. With this
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our view on current issues and best practices in Enterprise Architecture as
well as aggregating interesting news from around the globe. We hope you find this newsletter useful
and enlightening. Links for
providing feedback, subscribing, or unsubscribing are available at the bottom of
this email. ************************************* Finding the Buy/Build Balance Introduction This month we will examine architectural factors to be considered
in determining an effective Buy/Build Balance for your organization. While many
enterprises view technology choices as Buy versus Build, it is much more useful
and accurate to view these choices through the lens of a Buy/Build Balance.
Through assessing the necessary resources and activities required in an
enterprise project, the total cost and impact of Buy/Build decisions can be
seen in a more precise setting. “Buy” projects of any scale inevitably involve some
percentage of effort towards development and customization - activities that
are frequently associated with “Build” projects.
“Build” projects on the other hand may be comprised mostly of
custom code, but also involve 3rd party packages, components, operating
systems, databases, and enterprise applications either as part of the
“Build” package or as an integration point. Buy/Build Factors Culture, Identity, and Competitive Advantage A factor that inevitably influences decision-making but is often
not discussed is the relationship between core IT competencies (development,
package implementation, or others) and the company’s culture, identity,
and competitive advantage in the marketplace. Is it an advantage to retain core
competence in the production of software?
Is your industry competitive or volatile enough that you are unlikely to
find suitable package applications? Many questions can be examined to arrive at
a base understanding of what information technology competencies are
value-added or commodity to your company. This collective understanding can
dramatically improve the success of planning and execution, and insure priority
and investment is given to the appropriate activities and technologies. Organizational Skills The internal and external skillsets necessary to define, develop,
manage, and operate a software system have direct bearing on the Buy/Build
Balance. Baselining the level of experience required in order to implement and
operate the system against your organization’s (and its partners)
abilities is an important indicator to assess for a Buy/Build decision.
Specific competencies should be examined, including an understanding where
broad versus deep experience is required, in each phase of the project including
ongoing maintenance. Skills
availability in the proximate market is also a consideration when choosing
packages and corresponding resource requirements. Business Analysis Whether the software is primarily developed internally or
purchased commercial off-the-shelf software (COTS), business analysis is
required to ensure that the system accurately handles the business needs,
goals, and scale. Typically, 40% of projects are spent in analysis and design
activities, and these activities still need to occur even in the case of a
“Buy” scenario. While design time may be reduced due to features
and constraints in the packaged software, it will not approach zero since
design is required to understand tradeoffs and options in the package. Analysis
time is more likely to remain the same for a given project with either the Buy
or Build approach emphasized. Design Options Flexibility in design options is commonly seen as an advantage for
a classic “Build” scenario. “But with a little time, we could
make it do X” is a recurring theme in such projects. Practically speaking
this is not always the case, however. Since enterprise projects deal in tight
timeframes, an approach which is geared towards “growing wheat to make
bread” may end up with less functionality options due to time and
budgetary constraints, or may wind up getting cancelled due to frequent changes
in scope or direction. A well thought-out package selection process which views
the packages integration and business rule and feature flexibility as high priority
items can achieve a similar or better choice of robust design options than many
“Build” scenarios. It is more important to consider architectural
constraints/limitations when choosing a package that represents a core
component within the architecture.
Alternatively, if a feature rich package is proven to meet the
functional and non-functional needs for its purpose, well-designed interfaces
can help bridge the gap. Quality Assurance and Remediation In effect, by licensing a software product, your organization is
licensing not just the software but the effort and resources of the
vendor’s QA department as well. This provides the advantage of allowing
your own QA team to focus more effort toward testing business logic and
relatively less effort on the technological “plumbing.” The flip side to this scenario is that when bugs are discovered in
a 3rd party product, then it is necessary to engage the vendor; and it is up to
the vendor to prioritize and provide a fix. This prioritization will be
positively or negatively driven by the external market’s concern for the
fix, which can hinder the response time for an individual customer and lead to
the customer feeling a lack of control. Ongoing Maintenance and Upgrades A perceived large advantage for licensing software is typically
viewed as the ability to harness the software vendor’s upgrade cycle. In
practice this is an important benefit, but upgrading software impacts the
organization beyond only development costs. In a classic “Buy”
scenario it is still necessary for the enterprise to design their specific
implementation, thoroughly QA the product, and manage deployment and support.
Some or all of these activities can certainly be outsourced to the vendor, but
this should be determined when establishing reliable plans and estimates.
Underestimating this effort and investment can lead to making a premature
Buy/Build decision, or tarnishing an otherwise successful implementation. Market Inertia It is absolutely critical to understand the motivations of your
partners. When evaluating vendors, this is determined by examining the market
that the vendors are supplying, and the inertia created by the collective
market demand. Even if a solution is an absolute match for your business today,
the evolution will follow the market investment, and you must understand this
direction to appropriately assess your success over time. Understanding the
degree to which your needs match or do not match the market direction is a
critical factor in determining your appropriate Buy/Build balance. This can
also help you assess your ability to take advantage of the “pilot-fish
effect” of small ISVs providing cutting-edge add-ons to market-leading
solutions (following the “big fish” of the market). Total Cost Savings The cost savings metric is generally trumpeted by champions of
both approaches as a major factor. Through this essay we have shown that it is
important to look beyond individual metrics and look at a Total Cost of
Ownership view when evaluating your Buy/Build Balance. TCO calculations are
often created with an agenda slanted a specific direction, which can minimize
many of the factors (and therefore minimize the understanding of corresponding
investments) discussed in the preceding sections. Conclusion The above factors describe some of the important considerations
which go into establishing the Buy/Build Balance. Understanding the impacts of
Buy and Build on the agility and market advantage of your business as well as
the internal design, development, and operational processes clarifies where to
balance the true strengths and weaknesses of these options and your individual
organization. -Patrick Christiansen and Gunnar Peterson ************************************* Enterprise Architecture News Debunking Outsourcing Myths An alternative viewpoint to commonly reported outsourcing stories. http://www.foreignaffairs.org/20040501faessay83301-p0/daniel-w-drezner/the-outsourcing-bogeyman.html Software Architecture as a Garden Bill Venners interviews Luke Hohmann on Growing, Pruning, and
Spiking your architecture. Enlightening metaphors for enterprise architects. http://www.artima.com/intv/architecture.html Bill Gates Returns from Think Week Interview with Bill Gates on thinking about mesh networking,
security and future directions. http://www.eweek.com/article2/0,1759,1556082,00.asp Usability Alert from Original Mac pioneer Jef Raskin author of "The Humane Interface" is
interviewed on the current state of the usability profession. http://socrates.berkeley.edu/%7Efrank/BerkeleyGroks_Raskin.htm Not So Fast... Apple's tagged by the Better Business Bureau to refrain from
fastest computer marketing. http://news.com.com/2100-1042_3-5180251.html?tag=nefd_top Migrating to Linux IBM has published a 9 step article on developers migrating from
Windows to Linux. http://www-106.ibm.com/developerworks/linux/library/l-roadmap.html Big Brands on NT4? Netcraft study finds large number of companies still using Windows
NT4 for Web Servers despite the fact the Microsoft is planning to discontinue
support at end of year. ************************************* Have your say Agree? Disagree? Insufficient data to judge? Email us at
views@arctecgroup.net, we want to hear from you. We will publish your name or
anonymize your response as requested. ************************************* Arctec Group News Arctec Group is planning a round-table forum session in the Twin
Cities, but would like to solicit your feedback for agenda topics. We realize there is continually a high
number of vendor or consulting sponsored events, and would like to determine
what you feel is missing from an architecture or strategic IT planning
perspective, to insure a positive and worthwhile session. Please email your thoughts to views@arctecgroup.net. ************************************* Arctec Group: Strategic Technology Blueprints www.arctecgroup.net Arctec Group Newsletter is a free monthly newsletter. Previous
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