Data Management Solutions for Analytics: Build it or Buy it?
by Johnny Connell, on January 14, 2021
My wife and I recently bought a toddler bed for my daughter. It wasn’t an easy decision.
As a self-proclaimed amateur woodworker, I’ve long wanted to build my daughter a bed. I researched safety standards. I sketched out plans. I even purchased the wood; maple with walnut accents.
Then the wood sat in my basement.
With the demands of everyday life, it was months before I could dedicate a weekend to building. But then as I started to build, I realized a few other things. I didn’t like the design as much as I thought, I’d need at least another full weekend to finish building, and worst of all: I’m not a master woodworker, evidenced by dozens of tiny mistakes.
A cost-efficient project that should have taken a weekend or two quickly turned into months. Costs doubled and hearts were broken when I scrapped it altogether and bought a bed from the store.
When I hear credit unions talk about building vs. buying their data management solution, the comparison is just all too familiar.
I wish someone told me these 4 things (before I committed to building over buying).
1. Building is customizable, but so is buying.
Building opens up a world of possibilities. By building my daughter’s bed, I could fully customize all the components (e.g. choice of wood, type of joinery, color of the finish, overall style).
Likewise, building a data management solution allows credit unions and other organizations to pick and choose what components they want and to customize their solution to meet their unique needs. The benefits are obvious:
- The ability to leverage their existing technology ecosystem to minimize the costs, integration challenges and learning curve associated with a rip-and-replace approach
- The opportunity to carefully select the right technology partners for back-end data governance and front-end data visualization, should they choose to add to their existing infrastructure
- The chance to build unique dashboards for various stakeholders based on the specific metrics and KPIs they care about
However, buying can surprisingly offer a lot of customization too. Many providers offer:
- The flexibility to leverage systems already in place at the credit union to optimize existing infrastructure and cut down on costs and ramp time
- The ability to create fully customized dashboards within a sandbox environment based on what the credit union uniquely cares about
Building offers more flexibility than buying; but buying has come a long way, allowing for and even encouraging and rewarding customization.
2. Buying can be a better value than building.
When I set out to build my daughter’s bed, I thought I’d save money. Surely buying the raw materials would be less expensive than purchasing the finished product, right?
That is, until the unexpected costs crept up on me. I didn’t have all the right tools on hand, so there’s another outlay. In the end, building cost about three times as much as buying, and that was before the botched build resulted in me ultimately buying a bed anyway.
Similarly, building a data management solution can be costly. While it may seem counterintuitive that buying can be less expensive than building, data management providers are often able to keep costs low for credit unions by:
- Offering volume-based pricing due to their scalable and repeatable implementation process, existing integrations, and technology ecosystem partnerships
- Eliminating the credit union’s need to hire additional personnel to manage the implementation, launch, training, and ongoing support
Hidden costs often creep up when building, making accurate budgeting critical to success. In the absence of that accuracy, credit unions should consider buying, allowing the solution provider to mitigate those costs on their behalf.
3. Building requires skill.
When you’re working with screws and right angles, you can build just about anything out of wood. I built my bed, my desk and my dining room table with relative ease.
But my daughter’s bed was different. I was committed to using hand tools instead of power tools, mortise and tenon joints instead of screws, and rounded “edges” instead of ninety-degree angles. But I quickly realized my previous experience in building farmhouse-style furniture didn’t translate to the skills needed for fine woodworking.
Building requires skill. Credit unions should carefully consider their personnel prior to taking on a build. A haphazard reporting solution can be put together with limited knowledge and time. But, a robust data management solution requires a master craftsman to:
- Integrate and align disparate data sources and formats through a data lake and conformed data warehouse,
- Uncover data defects in real time to ensure data quality consistently,
- Build stakeholder-specific reports and dashboards to track key metrics,
- Layer in predictive analytics to make data-driven decisions.
In the absence of that master craftsman, credit unions need to decide between hiring for the build or outsourcing for the buy. Either way, they can’t afford to go it alone.
4. Building takes time.
I was optimistic my daughter’s bed would take two full days to build. It ended up being more than twice that; but even more importantly, I didn’t take into account the competing priorities that would fill my time for several months, making it nearly impossible to carve out a full 40 hours to build.
Credit unions should be cautious about their building expectations: regarding both start time and time to completion. If personnel have competing priorities or responsibilities, it will be difficult to stay fully dedicated to the project, resulting in unforeseen delays. That in combination with the challenges of the first three points (i.e. time associated with customization requests, time associated with securing more budget for unexpected costs, time associated with hiring new personnel) can lead to an unending project.
Despite my bruised ego, my daughter still got her bed. It’s not exactly what I envisioned and it took more time and money than I expected, but it was a valuable learning experience for me. And in the end, she still loves it and goes right to it when we enter her room.
There are pros and cons to building vs. buying. Building is right for some. Buying is right for others. But wherever you are in your evaluation, my recommendation is to not go it alone.
Arkatechture can help with exactly that. Whether you’re building and need staff augmentation or project management support or buying and need a managed service provider with an end-to-end solution, Arkatechture is here to serve as that trusted advisor.