Marketing Information System: Making the Decision to Build or Buy

Overview
Organizations seeking marketing information systems are often faced with
making the decision to either buy an application package or to
design a custom system using in-house or 3rd party software developer.
This white paper examines the trade-offs and considerations.


Analysis
Choosing to build versus buy is a strategic decision with lots of
ramifications. The decision-maker needs to weigh a number of factors to
be able to make the right decision. This white paper makes a strong case
for the purchase of an application package.

Action
Use this white paper as a starting point to help you evaluate all the
factors involved in making the build versus buy decision, and to develop
a rationale for your choice.


Until recently, you had little choice.
Packaged marketing information systems didn’t exist. An organization
wanting a marketing information system had to build it from scratch.

Today, an organization that wishes to get a marketing information system
can build a custom solution or buy a packaged software application. Many
marketing executives are also getting pressure from their IT organization
to consider developing a custom solution. While
building a custom solution may seem the best approach, it is a course of
action fraught with complexities that are difficult to anticipate, unless
you have done it before.

Today, many marketing executives are appropriately unsure of whether they
should build or buy.

Preliminary Considerations and Due Diligence
Whether or not to build an in-house marketing information system solution
boils down to an honest assessment of the needs of the organization and
what it will take to meet those needs. Evaluate the following factors with
respect to your proposed project:

• Availability of in-house resources, including both marketing and software development staff.
• Complexity and purpose of the project.
• Needs of the organization.
• Time to deployment.
• Is your development staff large and skilled enough to build a marketing
information system in-house?
• Are your resources best spent developing homegrown marketing software?
• Are marketing process automation and marketing operations best practices
the core competency of your IT staff?

Still considering a custom-built solution? The next section details some of
the problems you might encounter with developing a marketing information
system in-house.

The Challenges with Custom Software Development
The complexity of today’s computing environments only magnifies the
difficulties of implementing custom marketing information systems. Problems
inherent in building marketing information systems from scratch include:
• Too expensive to develop
• Too expensive to maintain
• Too time consuming
• No real process improvements

Too Expensive to Develop
Often home-grown solutions appear to have no real cost. After all, your
in-house programmers’ time is already paid for. In-house development can be
much more costly than it appears though—far more so than that seemingly
expensive software package. Don’t just think about the
salaries of your development team; be sure to include the opportunity
cost of the marketing department in design meetings, planning meetings,
application testing, etc.

While marketing is a strategic business function, there are far fewer users
of marketing information systems than other core business applications. The
ratio of users per developer-hour will be far higher if the software
has thousands of users rather than dozens or hundred.

Too Expensive to Maintain
Applications must be maintained. Maintaining a custom-built marketing
information system and keeping it running on the current platform or a
succession of platforms can be an expensive proposition. And, what happens
when the programmers who developed the original application move on to
other projects and other jobs? The maintenance of custom applications is
complex, time-intensive and fraught with undocumented functions. Unless the
marketing information system is well documented—another complex and
expensive proposition—you will
end up throwing more money into maintenance than you ever planned for.

Your marketing information system should evolve and improve, too.
Custom-built applications tend to be written once, and left alone until
something breaks or an incompatibility develops.

Too Time Consuming
Traditionally, in-house application development is characterized by long
learning curves and slow deployment schedules. Time consuming
custom development requires considerable due diligence to scope and plan
the entire project. Don’t just think about the time spent by your
development team; be sure to include the time spent by the marketing
department in design meetings, planning meetings, application testing, etc.

A typical software development project requires as much time spent on
scoping, designing, planning and gathering needs as writing software. Don’t
underestimate the amount of time members of the marketing
department will spend in meetings to explain needs and requirements, to
review specifications, and to test software.

No Real Process Improvements
One danger of in-house development lies in the tendency to fall back on
tried-and-true methodologies. Unfortunately, following the old ways of
doing things won’t necessarily yield the optimal solutions. Development
methodologies are always changing. Unless your programmers are
versed in the latest best practices, you risk ending up with something
that’s less than what you hoped and planned for. Even if your
organization’s business processes have evolved over time, they may still
not be refined enough to reflect best practices.

The Benefits of Buying a Package
In most cases, a packaged marketing information system can overcome the
challenges presented by custom-built solutions. Packaged solutions leverage
existing technology and offer the following compelling reasons
to buy:
• Low total cost of ownership (TCO)
• Get up and running faster
• Better ease of use; better training
• Higher level of integration with third-party technology
• Integrated, cross-functional processes
• Optimization of development resources
• High reliability through proven performance

Low Total Cost of Ownership (TCO)
As stated in the previous section, high costs remain the primary drawback
to developing in-house marketing information systems. Development and
especially maintenance costs are often underestimated. Packaged software
keep costs down through:

• Fast implementation and deployment, which reduces the cost of the entire
process, and gets benefits accruing faster.
• Constant technological and marketing innovation.
• Best practices.
• Project scalability, which allows the organization to start with a small
deployment before investing in the whole enterprise.

Up and Running Faster
The long development cycle of a custom-built solution isn’t an option if
your organization needs to deploy a marketing information system quickly.
Buying a package requires much less scoping, minimal design, and testing.
Depending upon which package you choose you could be
up and running in days or weeks.

Ease of Use
Packaged applications typically have better ease of use: if they aren’t no-
one would buy them. As a result, packaged software developers invest
heavily in usability testing, and talented graphical user interface
designers. Software packages typically include comprehensive online help
and written documentation, too.

Easy to learn
Packaged software is typically easier to use than custom applications.
Considerable effort is devoted to making the software usable. Packaged
software vendors typically offer training; their curricula are well
designed and are time tested. Only a packaged software developer can offer
training performed by expert staff whose sole responsibility is training
users how to use the marketing information system. Users can immediately
begin working on projects after a short training period.

Higher Level of Integration with Third-Party Technologies
When an organization sets out to develop a marketing information system in
house, it may not consider additional requirements that may become
desirable or needed after the fact. In effect, the new marketing
information system may not end up offering enough in the way of
functionality. In-house marketing information systems are often
developed to meet the needs of the moment, without taking into account
rising user demands and data volumes. Packages, on the other hand, are
often designed to handle both small and large workgroups.

Optimization of Development Resources
A custom marketing information system project pulls programmers away from
an organization’s regular development work. After the fast
deployment of a packaged application, on the other hand, you can focus
development resources on your business’s core competencies.
Developers can get to work on exciting new projects that will further
organizational goals and add to the bottom line.

High Reliability Through Proven Performance
Building a marketing information system in-house is only the beginning.
Next comes a time-consuming iterative testing process, during which
developers fine-tune the application and hope for the best in terms of
reliability. In contrast, a good packaged integration solution offers high
reliability by definition, right out of the box. The vendor and other users
can attest to its proven performance.


Conclusion: Buy Trumps Build
In today’s competitive marketing environment and complex IT
landscape, custom built marketing information systems can’t stand up to
available packaged software. Quick-hitting, cost-effective packaged
solutions can meet your organization’s needs with nominal use of
internal IT resources. Where custom-built solutions present expensive
development and maintenance considerations, packaged options counter with
proven lower total cost of ownership. Where in-house integration involves
long deployment cycles, easy to-learn and easy-to-use software packages
speed time to value. Where custom applications can get mired
in old methodologies and lack scalability, available marketing information
systems offers the flexibility of customization options and the scalability
that meet your organization’s needs—now and into the future.

Even though a custom-built marketing information system may seem to offer
control and flexibility, it will only lock your organization into a
suboptimal solution. Is marketing best practices really your organization’s
core competency? Can you spare the programming resources? Do you have
several months to develop, test and fine-tune your application? If
like most organizations you answered “no” to all of the above, buying a
highly reliable and functional packaged marketing information system is
your best option.