Should you build or buy your interconnect voice management solution?

We’ve discussed this before here. But, it’s always worth revisiting because the idea of building solutions always seems to give the impression (albeit a false impression) that it can be done better, faster and cheaper than buying a market priced solution that is “off-the-shelf”. The converse is always true. If there are commercially available products providing the capabilities sought, then it will always be cheaper to buy than to build. (Let me repeat that for emphasis) IT IS ALWAYS CHEAPER TO BUY AN OFF-THE-SHELF SOLUTION, when one exists.

In fact, there are only a couple of reasons to ever build a solution when there are commercially available solutions that exist. They are: 1. Building will provide you a competitive advantage in the marketplace and 2.The infrastructure or operations of the company are so unique that adopting an off-the-shelf solution will be too disruptive and seriously delay realizing the benefits of the solution while introducing risks to the current performance of the business. That’s it.

So, when it comes to the interconnect voice marketplace, a CSP has to evaluate and determine:

Whether or not there exists commercially available solutions that address their needs
Whether or not their ability to adopt an off-the-shelf solution is a real problem
Whether or not building the solution will provide them a competitive advantage in the marketplace
The true cost of building, not the initial budgeted investment

In our opinion, there is really only one reason to build it yourself, it will provide a competitive advantage in the marketplace. Think about it. Why would you devote resources to building tools that are readily available and are being used by your peers in the industry?  We hear price is a big driver in any build vs. buy analysis. But we discount the validity of that being a reason.  If you believe in the economic axiom that goes, “ The market sets the price”, then how could a readily available product be more expensive than the cost you would incur in building it? We don’t think it can. In fact, we know it can’t. If it were true, than the market price would decline. It's basic price/supply/demand curve of economics. If the price is too high, demand reduces and the market responds. That basic principle is what governs pricing in any market. So there is no way, no how, anyone can “build” an equivalent solution to ours at a price point that is cheaper than buying it off the shelf. The only real reason is that it will provide you a competitive advantage.  And in the interconnect voice marketplace, a commodity driven market, there are very few ways to create competitive differentiation, that is what makes it a commodity.

So, no, you should NOT build your interconnect voice management solution. Just like you shouldn’t build your own payroll management solution. Just like you shouldn’t build your accounting solution. Just like you shouldn’t build your CRM tool. If commercial-off-the-shelf tools exist that meet 75% or more of your needs, then buy it. Always buy. In the long run it’s the smarter, more prudent decision and it will save you money.

Andrea Rona