February 2024

Build, or buy, or both? How should leaders think about making informed decisions?

It’s the question that most leaders will face at some point and it requires careful consideration. But what if there's a more effective approach?

At Loomery, we believe it’s not actually about "build OR buy," but rather "build AND buy." So what are the considerations that help you decide where to build and where to buy? And how do you bring others along on the journey with you?

To answer this question, we brought together three industry leaders from MOO, Naked Wines and Contentsquare to challenge the traditional build vs. buy discussion. 


The discussion was full of tangible takeaways, so we’re sharing a recap of the discussion and the full video recording below:

Start with clear criteria & make informed decisions

It’s important that the first step is defining your success criteria and key use cases. 

Understanding your company’s needs and goals will guide an efficient decision-making process, particularly when researching a variety of tools.

Calum pointed out a key advantage of trialling software: it doesn't lock you into buying it straight away and serves two crucial purposes:

1. Refining your priorities: Demoing different options helps you question and refine your key use cases. By testing a solution in anger, it allows you to eliminate requirements you initially thought were essential but might not be in practice.

2. Making an informed decision: By evaluating diverse solutions, you gain a clearer understanding of the feasibility and benefits of building a custom solution versus buying an existing one. 

You’re not as unique as you think you are!

All speakers agreed that while most companies believe their challenges are unique, that's often not the case. Many common problems have already been addressed by existing software solutions specialising in specific areas.

Jil also emphasised the value of learning from competitors. While their solutions might not directly fit your needs, exploring their approach can provide valuable inspiration. Every industry has its own customer expectations and standard tools. By understanding the customer journey through your competitor's lens, you can determine which aspects to build yourself and which can be effectively handled by existing software.

Bring your team along on the ride

Any major technology initiative, whether building a  whole new product or a smaller capability will come with its own set of change management and cultural challenges. Before buying, it’s therefore important to involve your team in your requirements gathering. This helps choose the right vendor and deepens their understanding of the problem, fostering a sense of ownership.

Neither build nor buy is a magic bullet, as David shared. Internal adjustments are inevitable regardless of the path, requiring open communication with stakeholders. He emphasised that explaining how a new tool can improve things will ensure a smoother transition.

Calum also flagged the importance of building a governance structure for when new tools are both built or bought. This ensures proper adoption and maximises your company’s ROI by establishing clear guidelines for effective use.

It's important to also consider past technical decisions when making new ones to avoid unintentionally undermining the team's confidence and expertise. This can be simply done through a decision log which serves as a valuable reference point when making future decisions.

Consider: what comes next?

The "build vs buy" decision isn't the end of the story. Both options come with ongoing costs that should be considered.

Jil suggested that leaders ask themselves:

  • For building: Can your team handle the ongoing maintenance and updates? Have you considered these costs? 
  • For buying: Do they offer adequate support and training for your team? How well can the product scale as your business grows? 

Additionally, don’t be afraid to have an open conversation with potential vendors to help you determine if their software can support your future needs.

A combined approach

The reality is that almost all tech stacks will be a mix of internal development and external solutions. By understanding where to focus on development versus using off-the-shelf products, you then dedicate your teams to truly high-value work. It’s also important to keep assessing whether your current tech stack meets your needs.Just because you bought something previously, doesn’t mean you shouldn’t build it further down the line.

If you want to learn more, watch the full video recording below: 

If you want to find out how we have used this approach with some of our clients including MOO and Naked Wines, then please get in touch below.

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