An Evaluation of Buy Versus Build for Portal Solutions by IDC

This IDC white paper presents the results of an IDC study, sponsored by IBM, that quantifies and compares the total cost of ownership (TCO) of in-house portal development with that of portals developed with IBM WebSphere Portal.
Data for the study was collected through 10 in-depth customer interviews with IBM customers that had experience with in-house portal development as well as portal development with WebSphere Portal. The data collected from these customers for both deployment scenarios is presented to show the representative costs associated with the two approaches. Key findings of the study include the following: - WebSphere Portalñbased solutions had a 29% lower five-year TCO on average compared with in-house-developed portals.
- Labor costs to deploy portals and applications with WebSphere Portal were 38% lower than with in-house solutions.
- Every $1.00 spent on WebSphere Portal software yielded on average $4.80 in IT labor avoidance.
- Initial deployments of portals developed on WebSphere Portal were 45% faster to market than in-house-developed counterparts.
- Portal applications developed on the WebSphere Portal platform had a 78% faster time to market than those built for in-house portals.
Portals are becoming integral enablers of business and IT innovation for many organizations. From first-generation content aggregation portals to more sophisticated enterprise process portals, organizations have used portal solutions to improve productivity, streamline business processes, enable new Web-based product and service delivery models, and provide IT with a powerful platform for new and composite application development.
A recent IDC survey found that 90% of organizations are planning to either maintain or increase their investments in portal solutions over the next 12 months (see Figure 1). The respondents cited concrete benefits from their portal projects and are now considering expansion of business portal use related to conducting collaborative operations in innovative ways. IDC found that the top business drivers for this ongoing investment center on using the portal infrastructure to automate additional business processes by taking advantage of features such as electronic forms to streamline paper-based processes, incorporating workflow capabilities, and taking advantage of composite applications or enterprise mashups to combine data in compelling new visual displays.
Figure 2 shows that in addition to leveraging the portal’s business process automation capabilities, survey respondents plan to take advantage of the portal’s ability to deliver self-service information through dashboards, add Web 2.0 collaborative tools such as wikis and blogs, and provide information aggregation services such as business networking applications to make it easier to discover and share expertise with colleagues.
While the business and IT values of portal solutions are fairly well understood, many organizations are facing the decision of how best to implement a portal. Should they develop their portal solutions in-house or purchase commercial portal solutions? Early adopters of portals who initially decided to get started by building their own portal solutions might find that trying to keep up with the pace of the technical evolution of portal software and the growing demands of their user communities to add new services puts a strain on their IT budgets, skills, and resources. In some cases, early adopters may have purchased a portal that works well with a limited set of applications and now desire to expand its use in new ways to satisfy additional business requirements.
Organizations that are contemplating adopting a portal for the first time need to determine where it makes sense to invest their IT budget. This requires an evaluation of the merits of building a portal from scratch versus taking advantage of the core portal engine, with the multitude of out-of-the-box capabilities that leading commercial portal software providers have developed and deployed successfully with hundreds of organizations over the past decade.
While no universal answer to the "build versus buy" decision fits every situation, several trends and patterns strongly favor a "buy" decision: Faster Time to Market. IBM’s Global CEO Study 2006 revealed that innovation for growth and market differentiation is at the top of the CEO’s agenda. As a result of accelerated globalization and technology advances, competition has risen to new heights. CEOs are looking for ways to gain an edge by reconfiguring their business models, optimizing operations, and launching new and better products and services to the market.