When to Build, When to Buy, When to Bolt: A C-Suite Guide to Platform Decisions in Digital Transformation

Explore the critical choices in digital transformation: build, buy, or integrate solutions for optimal business success.

Choosing the right platform strategy - Build, Buy, or Bolt - is critical for digital transformation success. Here’s a quick breakdown to help you decide:

  • Build: Ideal for unique needs like market differentiation, tailored workflows, or advanced security. Offers full control but requires significant time, cost, and resources.
  • Buy: Best for standard functions like HR, finance, or CRM. It’s faster and cost-effective but may limit customization and lead to vendor lock-in.
  • Bolt (API Integration): Perfect for adding specific features quickly, like payment processing or data enrichment. Balances speed and flexibility but depends on third-party services.

Quick Comparison Table

Factor Build Buy Bolt
Time to Market 6–12+ months 1–3 months 2–4 months
Initial Cost $250K–$1M+ $50K–$200K/year $25K–$100K/year
Control Level Complete Limited Moderate
Scalability Custom Vendor-dependent API-limited
Maintenance Burden High Low Medium

Key Takeaway: Use a mix of strategies - build for core differentiators, buy for standard functions, and bolt for quick enhancements. This approach aligns technical decisions with business goals, ensuring both agility and long-term value.

Acquire companies using the buy and build strategy | Jonathan Jay | 2025

Building Custom Solutions: When and Why

In the world of digital transformation, creating custom solutions can set businesses apart from their competitors. In 2022, the custom software development market reached a value of $29.29 billion, and it's expected to grow at an annual rate of 22.4% from 2023 to 2030.

Top Reasons to Build

Custom development makes sense when it delivers a competitive edge. Companies should prioritize building features that address specific needs like:

Business Need Benefit of Custom Development
Market Differentiation Offers unique functionality competitors can't replicate
Process Optimization Tailors workflows to fit internal operations perfectly
Data Intelligence Leverages unique algorithms and analytics
Integration Control Provides full control over system connections and data flow
Security Requirements Strengthens protection for sensitive operations

"Spend some time working with the data transformation steering committee and other stakeholders to debate the pros and cons of building out various pieces of the data ecosystem. The primary factor should come down to whether or not a given solution offers true competitive advantage for the organization. Does building this piece of software make it harder for your competitors to compete with you? If the answer is no, then it is better to focus your engineering and data science resources on deriving insights from your data." - Databricks Blog

Build Approach: Pros and Cons

While custom solutions provide unmatched control, they come with their own set of challenges:

Advantages Challenges
Complete control and tailored workflows Higher upfront costs
Flexible upgrade paths Longer development timelines
Full intellectual property ownership Ongoing maintenance and security demands
Improved data security Requires significant resource allocation

"In business today, the custom software has become a shortcut to increase competitive advantage." - IntechCore GmbH

Required Skills and Tools

To ensure success with custom solutions, organizations need strong internal expertise in several areas:

Skill Category Key Capabilities
Technical Development Cloud computing, full-stack development, API integration
Security Threat modeling, encryption, compliance management
Operations DevOps practices, continuous integration/deployment
Architecture System design, scalability, and integration planning

DevOps practices, in particular, have become essential. The percentage of companies fully adopting DevOps has grown from 10% to 17% since 2017. Teams should also document every step of the process, from architecture decisions to testing and deployment plans, to ensure smooth implementation and maintenance.

Building custom solutions is about using the right skills and resources to create something that delivers a distinct advantage. Up next, we'll explore ready-made solutions that prioritize speed and cost efficiency.

Buying Ready-Made Solutions: Speed vs Cost

A surprising 42% of buyers find it challenging to choose the right software for their business, and 60% regret their decisions within just 18 months. That’s a lot of wasted time and money. So, how do you avoid falling into this trap? Let’s explore where ready-made solutions shine and how to make smarter choices.

Standard Business Functions

Ready-made software is a great fit for processes that don’t require heavy customization. Think of areas where businesses generally follow the same playbook. Here are some examples:

Business Function Common Software Categories
Finance & Accounting ERP, Accounting Platforms
HR Management HRIS, Payroll Systems
Customer Service CRM, Help Desk Solutions
Document Management Cloud Storage, DMS
Communication Email, Chat, Video Conferencing

These functions are ideal for off-the-shelf solutions, making it easier to evaluate vendors and implement tools quickly.

How to Choose Software Vendors

Picking the right vendor isn’t just about price or features. A well-rounded evaluation can save you from headaches down the road. Here's what to focus on:

Evaluation Criteria Key Considerations Weight
Total Cost of Ownership Upfront costs, subscriptions, maintenance High
Integration Capabilities API availability, data exchange options High
Security & Compliance Industry certifications, data protection Critical
Scalability User limits, performance at scale Medium
Support Services Response time, support channels Medium

"A strong evaluation goes beyond simply considering the per-user price and a list of features. It should provide accurate insights into which product best serves your operations and meets your business goals."

  • Vendr Team

By carefully weighing these factors, you’ll be better equipped to select software that aligns with your business needs.

Customization Limits

One of the biggest pitfalls in software implementation is misunderstanding the difference between configuration and customization. For example, a construction firm faced delays and a 30% budget overrun when transitioning to Sage 300 CRE due to unforeseen billing complexities.

Here’s what you need to know:

  1. Configuration vs. Customization: Configuration relies on built-in settings, while customization involves altering the code. Customization often leads to increased risks and complexity.
  2. Implementation Risks: Poor planning and misaligned expectations can derail projects. As mentioned earlier, that construction firm's ERP implementation ran into trouble because their customization needs weren’t properly scoped.
  3. Best Practices:

"Most customers want and need a solution that meets their exact requirements. However, the more complex the requirements, the less likely it is that a commercial off-the-shelf (COTS) solution is going to come out-of-the-box meeting their business needs."

To avoid these pitfalls, focus on the following actions:

Action Purpose Impact
Document Requirements Define must-have vs. nice-to-have features Reduces scope creep
Test Thoroughly Validate functionality with real data Prevents post-launch issues
Plan for Training Ensure proper system utilization Maximizes ROI
Monitor Performance Track system effectiveness Enables optimization

Striking the right balance between configuration and customization is key. Over-customizing can lead to future upgrade challenges and higher maintenance costs. Whenever possible, stick with configuration-based solutions for essential features to keep things efficient and scalable.

API Integration: Adding Specialized Features

APIs are the backbone of many successful businesses today. For instance, 70% of Expedia.com's revenue and a staggering 90% of eBay's revenue come from API-powered solutions. By integrating APIs, businesses can enhance their platforms with specialized features that would otherwise be challenging or time-consuming to develop in-house.

When to Use APIs

APIs are ideal for adding unique functionalities without duplicating efforts on standard features. Here are some practical scenarios where API integration can deliver measurable benefits:

Integration Type Business Impact Example Use Case
Payment Processing Reduces compliance workload Stripe for payment handling
Authentication Enhances security OAuth for user verification
Data Enrichment Provides better insights Market data feeds
Core Services Speeds up deployment Maps, messaging, analytics

A great example of API success is Starbucks. By integrating APIs for personalization and payment processing, Starbucks saw mobile orders account for 26% of U.S. transactions, while their rewards program grew to 24 million active members by 2021. This illustrates how well-chosen APIs can directly impact customer engagement and business growth.

API Management Best Practices

Once you've identified the right APIs to integrate, managing them effectively is the next step. Here are some best practices for ensuring secure and efficient API usage:

  • Security and Authentication: Implement OAuth protocols and enforce strict access controls to protect sensitive data.

    "API integrations let you easily deploy advanced functionality that would be too complex or time-consuming to build yourself." - James Walker from @Merge

  • Performance Monitoring: Keep an eye on response times, error rates, usage patterns, and rate limits to ensure smooth operation.
  • Version Control: Regularly update APIs while maintaining backward compatibility to avoid disruptions.

API integration not only streamlines operations but also fuels growth and adaptability. Companies like Dispatch have used APIs to scale their operations effectively.

"As a key component of digital transformation, APIs let companies keep current with the always-changing digital scene and innovate. They let companies respond more easily to changes in consumer tastes and the state of the market." - Devico Team

Choosing Between Build, Buy, or Bolt

When tackling platform decisions in digital transformation, organizations often weigh three strategies: build, buy, or bolt. While CEOs tend to lean toward bolt-on solutions for their perceived speed, no single approach guarantees success across the board.

Decision Scoring Guide

To make an informed choice, evaluate each option based on these key factors:

Decision Factor Build Buy Bolt
Time to Market 6–12+ months 1–3 months 2–4 months
Initial Cost $250K–$1M+ $50K–$200K/year $25K–$100K/year
Control Level Complete Limited Moderate
Maintenance Burden High Low Medium
Scalability Custom Vendor-dependent API-limited
Integration Complexity Low Medium High

Consider your organization's unique needs - like technical expertise, budget constraints, speed to market, and long-term goals - when scoring these factors. Each choice comes with trade-offs, so aligning them with your strategic vision is critical.

Risk Comparison Chart

Every approach carries risks. Here’s a breakdown of potential pitfalls and ways to address them:

Approach Primary Risks Mitigation Strategies
Build Resource drain, extended timelines Start with an MVP and leverage modern frameworks
Buy Vendor lock-in, customization limits Negotiate exit terms and assess configurability
Bolt API dependencies, integration complexity Use fallback systems and maintain thorough documentation

"CIOs need to embrace digital as a core technology imperative." - Nigel Fenwick, Author of the report

The most effective organizations use a mix of these strategies. They build core differentiators to stand out, buy off-the-shelf solutions for standard business functions, and bolt on specialized features through APIs when flexibility and speed are priorities.

This approach thrives on collaboration between CMOs and CIOs, ensuring that technical choices align seamlessly with business goals.

"CMOs Must Partner with CIOs To Transform Toward a Digital Business." - Nigel Fenwick, Author of the report

sbb-itb-e464e9c

Success Story: Payment System Integration

This case study showcases how we successfully combined ready-made APIs with tailored development as part of our broader Build, Buy, Bolt strategy.

Project Background

While developing our property management platform, we faced a critical decision: should we create a custom payment processor to handle the complexities of leasing, or invest in an existing solution? Building a fully custom billing system would have required significant time and resources, particularly to ensure compliance and security.

Implementation Method

We opted for a hybrid approach that struck the right balance between efficiency and customization:

  • Integrated Stripe's payment processing APIs to handle cards and digital wallets.
  • Developed custom logic to accommodate the unique schedules and requirements of leasing payments.

This blend of off-the-shelf tools and tailored development allowed us to address our specific needs while keeping the timeline manageable.

Results and Benefits

The hybrid solution delivered on all fronts. By leveraging Stripe's robust functionality and layering it with our custom leasing logic, we cut development time by about four months. The platform now supports a variety of payment options, including Apple Pay and Google Wallet. This example highlights how integrating top-tier tools with custom enhancements can streamline processes and accelerate digital transformation efforts.

Common Platform Strategy Mistakes

When using the Build, Buy, Bolt framework, steering clear of common missteps is essential for achieving sustainable success.

The Pitfalls of Excess Customization

Going overboard with customization can lead to skyrocketing costs and unnecessary complexity. It often results in higher maintenance expenses, difficulties with integration during updates, reduced flexibility, and the accumulation of technical debt. Gartner analyst Mark Raskino refers to this tendency as "techno-centrism", where organizations chase cutting-edge technology without a clear, strategic purpose.

While customization issues can be damaging, relying too heavily on external APIs presents its own set of challenges.

Risks of Over-Reliance on APIs

Once customization concerns are addressed, it's equally important to tackle the dangers of depending too much on third-party APIs. Heavy reliance on these external systems can threaten the stability of your platform.

"Digital business is about reinventing your industry." – Mark Raskino, Gartner Analyst

To minimize the risks tied to API dependency, use the following framework:

Risk Factor Impact Mitigation Strategy
Service Outages Business disruption Develop fallback functionality
API Changes Feature breakage Build abstraction layers
Data Privacy Compliance issues Implement encryption and access controls
Cost Fluctuations Budget overruns Set usage limits and monitor closely

Preparing Maintenance Teams for Success

Long-term digital transformation requires more than just choosing the right platform - it demands a strong and well-prepared maintenance team. These teams are the backbone of ongoing platform performance.

"Your facility maintenance professionals are the cornerstone of your facility's smooth operation. They play a vital role by ensuring all equipment and infrastructure function optimally."

To ensure effective platform upkeep, organizations should focus on clear documentation, continuous training, proactive monitoring, and efficient resource allocation.

"At every level your thought should be 'Digital is core.' It's not an add on, not a substitution, not support, not something other people do. It's us."

Platform Maintenance Requirements

Required Technical Skills

Maintaining modern platforms demands expertise in Site Reliability Engineering (SRE) and Security Engineering. Teams should possess skills in the following key areas:

Skill Area Core Competencies Implementation Focus
Infrastructure Cloud architecture, Kubernetes, serverless Horizontal scaling, CDN optimization
Security Compliance as code, access controls Embedded security services
Monitoring Observability tools, performance metrics Proactive issue detection
Data Management Pipeline creation, curation Reliable data asset management

To ensure sustainable operations, it's crucial to distribute these skills across team members. Relying on a single "hero engineer" can create bottlenecks and increase risk. A well-rounded team minimizes single points of failure and promotes long-term platform stability.

In addition to technical expertise, a solid change management process is critical for handling platform evolution effectively.

Change Management Process

A structured approach to change management works for projects of any size. The process typically involves these key steps:

  • Assessment and Planning: Record decisions and establish clear implementation roadmaps.
  • Development Controls: Enforce compliance checks and rigorous testing protocols.
  • Deployment Procedures: Use defined release management practices for smooth rollouts.
  • Monitoring and Optimization: Implement performance tracking systems and feedback loops.

"The right change management framework provides clarity, structure, and confidence, transforming uncertainty into advantage." – OCM Solution

To maintain scalability and security during platform updates, organizations should adopt modular design principles. This method allows for:

  • Breaking down complex systems into manageable components.
  • Supporting stateless scaling models for flexibility.
  • Embedding essential security services from the outset.
  • Building reliable data pipelines for consistent operations.

Clear communication is another cornerstone of successful platform maintenance. Dedicated communication channels help keep stakeholders aligned and ensure seamless transitions during updates. Additionally, a centralized support system with comprehensive training materials can address questions and issues promptly.

Balancing innovation with stability is essential for long-term reliability. While experimenting with new technologies, platform engineers must ensure core functionality remains intact. Prioritizing developer input and fostering collaboration in the design process creates an environment where continuous improvement thrives.

Conclusion: Matching Platforms to Business Needs

The Build, Buy, Bolt framework offers a structured approach to achieving measurable business results. For instance, in 2020, digital leaders saw a 47% return to shareholders, compared to just 27% for others.

When deciding on platform strategies, organizations should evaluate three critical dimensions:

Dimension Success Metrics Impact Areas
Business Value ROI, Revenue Attribution $9.53M in measurable benefits
Developer Experience Time to Market, Deployment Speed 80% reduction in build/deploy time
Customer Impact Conversion Rates, Traffic Growth Up to 90% performance improvement

These dimensions ensure that technical execution aligns seamlessly with business goals, reinforcing the importance of linking platform investments to tangible outcomes.

"What gets measured gets managed, or put another way, your results will be determined by what you are measuring. Choose what you measure carefully to achieve the desired results. Keep the number of metrics small and manageable, ideally three or four, and at most seven key ones because people cannot focus on multiple pages of data."

To ensure platform success, it's essential to align technical capabilities with overarching business objectives. A strong platform strategy should prioritize:

  • Online solutions that boost supply chain transparency
  • Advanced data management for consistent, actionable insights
  • Digital learning initiatives to strengthen internal capabilities
  • Master data governance for improved accuracy and reliability

"We focus on measuring our progress against what we set out to do with a balanced view across our results and challenges. We track KPIs on execution, risks, outcomes for benefits, and costs."

FAQs

How should a company decide whether to build, buy, or integrate a platform during digital transformation?

When deciding whether to build, buy, or integrate (bolt) a platform during digital transformation, it’s important to weigh several factors carefully:

  • Time to Market: Developing an in-house platform can take years, delaying your ability to launch. On the other hand, purchasing or integrating existing solutions can significantly speed up implementation.
  • Cost and ROI: Building a custom platform often comes with hefty upfront costs, while buying or bolting pre-made solutions typically requires a smaller initial investment and may deliver faster returns.
  • Customization Needs: If your business demands unique features or highly tailored solutions, building might be the way to go. But for more standard functionalities, pre-built or integrated solutions can often meet your needs without the extra effort.
  • Long-term Maintenance: Custom-built platforms require ongoing resources for updates and upkeep, whereas vendor-supported solutions shift that responsibility externally, potentially saving internal resources.
  • Competitive Advantage: Focus your efforts on building platforms that set your business apart. For standard tools or additional capabilities, buying or bolting can be a more practical choice.

The best approach depends on your company’s specific goals, resources, and appetite for innovation. Be mindful of challenges like vendor lock-in or excessive customization, and aim for a strategy that aligns with your broader digital transformation objectives.

What are the best practices for managing risks when using third-party APIs?

To tackle risks tied to third-party APIs, businesses should prioritize solutions built on open standards. This ensures systems remain compatible and adaptable, even as technology evolves. Another smart move? Collaborate with multiple vendors to avoid becoming overly reliant on a single provider.

When working with vendors, it's crucial to negotiate contracts that cover key elements like data portability, transparent pricing, and well-defined exit strategies. Don’t overlook hidden long-term costs, such as vendor lock-in, and choose tools that enable smooth integration across platforms. These steps help businesses reduce risks while staying flexible and prepared for the ever-changing demands of digital transformation.

What essential skills and tools are needed to build custom software during digital transformation initiatives?

Successfully creating custom software for digital transformation hinges on blending technical know-how, strategic foresight, and the right set of tools. Essential skills include software architecture, API integration, and project management to ensure the end product aligns with your business objectives. Teams should also have expertise in UX/UI design, data security, and scalability to deliver a solution that’s both functional and user-friendly.

When it comes to tools, a solid development framework, version control systems like Git, and collaboration platforms are crucial for keeping workflows efficient. Quality assurance relies on effective testing tools, while monitoring tools are key to maintaining performance after launch. Building internal expertise in these areas is equally important, so your team can confidently manage and enhance the platform as your needs evolve.

Related posts