Performance Management: Build Versus Buy

White Paper
Performance Management: Build Versus Buy
Kelly Stropp
As more companies seek out performance management capabilities to gain a competitive advantage or keep pace with rivals who have already established an edge, the decision to build or buy a performance management solution must be considered. This paper will walk readers through the pros and cons of the build versus buy debate in order to help make practical business decisions for long-term success.
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Because performance management can deliver a return on investment through lower operating costs and staff attrition, better sales production and supervisor productivity, contact center decision-makers have naturally become curious about the best way to leverage these solutions. As with any major investment in corporate infrastructure, the decision to buy or build that a performance management solution must be considered-and to what degrees.
Performance management solutions were initially championed in the 1990s by small, best-of-breed companies with short track records. Seeking to minimize vendor risk with unknown firms, a number of early adopters felt more comfortable installing performance management solutions that they developed and controlled internally. As performance management providers continued to thrive, business evolution took its course-smaller providers perished or were absorbed, stronger developers grew their customer bases and participated in mergers.
Determining the Best Long-Term Option
Even today, it is not uncommon for companies to attempt building their own performance management solution only to decide that buying is the better option for long-term success. One performance management vendor estimates that 70 percent of its new clients initially attempted internal development for their first-generation system but have made a strategic decision to buy a proven solution.
Now that top-shelf enterprise software developers with proven track records play a major role in performance management development, it is worth considering whether there remains a strong case for building performance management solutions internally.
The key strength of an internal, custom-developed application is that it can be tightly tailored to the client company's unique business environment. Developers need not concern themselves with marketability to a broader range of clientele. However, they may need to consider the prospects of business expansion, including mergers with companies with different operating procedures and product lines, could cause the scope of the performance management solution to change over time.
Internal development relies on the experts in the customer's business to define the solution that they believe will be right for the company. And with development platforms completely dictated by the company's own developers, meeting internal standards for security can be expedited.
Making Decisions Based on Value
Some of the arguments for internal development are based more on appearances than value. There may be strong resistance among the IT group to learn new applications-the "Not Built Here" syndrome. C-level executives may prefer the appearance of investing company money on internal projects and the professional development of its own employees, rather than fund a software company's operations.
This argument loses its luster, however, if it turns out that an "internal" built process requires the participation of outside contract programmers, or if pulling developers off of other projects to create a performance management solution means the company must rely on outsourcers to cover their previous IT workload.
2©2008 IEX Corporation. All rights reserved. Performance Management: Build Versus Buy
Buying a third-party performance management solution may require a greater up-front investment in consulting services to ensure that the vendor understands the organization's specific business needs. The strength of the "80/20" rule is also a ... [download for more]