This article provides a detailed response to: How does the shift towards remote work influence Make vs. Buy decisions in technology infrastructure? For a comprehensive understanding of Make or Buy, we also include relevant case studies for further reading and links to Make or Buy best practice resources.
TLDR The shift towards remote work has made Make vs. Buy decisions in technology infrastructure more complex, necessitating deeper analysis of cost, scalability, security, compliance, and Strategic Planning to align with organizational goals.
The shift towards remote work has significantly influenced the Make vs. Buy decisions in technology infrastructure for organizations worldwide. This trend, accelerated by the COVID-19 pandemic, has not only changed where employees work but also how organizations approach their technology needs. The decision to develop technology in-house (Make) or to purchase it from external providers (Buy) has become more complex, requiring a deeper analysis of cost, scalability, security, and strategic alignment.
Impact on Strategic Planning and Cost Considerations
In the context of remote work, organizations must reassess their technology infrastructure to ensure it supports a dispersed workforce. This reassessment often leads to a reevaluation of Make vs. Buy decisions, with a focus on cost-effectiveness and the ability to scale rapidly. For instance, the need for robust, secure, and scalable video conferencing and collaboration tools has become paramount. Organizations must decide whether to develop these tools in-house or to purchase them from established providers. According to a report by Gartner, the global spending on cloud services, a key component of remote work infrastructure, is expected to grow significantly, highlighting the increasing reliance on external technology solutions.
Cost considerations extend beyond the initial investment to include maintenance, updates, and support. Developing in-house solutions may offer more control but requires a significant upfront investment in talent and technology. On the other hand, buying solutions can be more cost-effective in the short term and allows organizations to benefit from the provider's economies of scale and expertise. However, it may lead to higher operational costs over time due to subscription fees and less customization.
Strategic Planning becomes crucial in this context. Organizations must align their technology infrastructure decisions with their long-term business goals. For example, if an organization aims to become a leader in digital innovation, investing in in-house development may provide a competitive edge. Conversely, if the goal is to scale quickly and efficiently, leveraging external technology solutions might be more strategic.
Learn more about Remote Work
Security and Compliance in a Remote Work Environment
The shift towards remote work has also brought security and compliance to the forefront of the Make vs. Buy decision. With employees accessing corporate networks from various locations, often using personal devices, the risk of data breaches and cyber-attacks has increased. Organizations must ensure that their technology infrastructure is secure and compliant with relevant regulations. This requirement can influence the decision to develop in-house solutions, which can be tailored to specific security needs, or to purchase from vendors who can provide standardized, compliant solutions.
According to a survey by Deloitte, cybersecurity is a top concern for organizations adopting remote work. The survey highlights the importance of secure, reliable technology solutions in enabling remote work while protecting corporate data. In-house development may offer more control over security features, but it requires significant expertise and resources. Buying solutions from reputable vendors can provide access to advanced security measures, which are continuously updated to address emerging threats.
Compliance is another critical factor, especially for organizations in regulated industries such as finance and healthcare. These organizations must ensure that their technology solutions comply with industry standards and regulations. While in-house solutions can be customized to meet specific compliance requirements, this approach requires a deep understanding of the regulations and continuous updates to the technology. Purchasing solutions from vendors who specialize in these industries can alleviate the compliance burden, as these vendors are typically well-versed in the necessary standards and regulations.
Operational Excellence and Performance Management
The ability to manage and support a remote workforce effectively is crucial for Operational Excellence. This includes ensuring that employees have access to the necessary tools and technologies to perform their jobs efficiently. The Make vs. Buy decision plays a significant role in this aspect. In-house development allows organizations to create customized solutions that perfectly fit their operational needs. However, this approach requires a robust IT department capable of managing and supporting these solutions.
On the other hand, buying technology solutions often provides access to dedicated support and service level agreements (SLAs) that guarantee certain uptimes and performance levels. According to a report by Accenture, leveraging external technology solutions can enhance Operational Excellence by allowing organizations to focus on their core activities while benefiting from the expertise of technology providers. This approach can also facilitate Performance Management by providing access to analytics and reporting tools that help monitor and improve employee productivity in a remote work environment.
Real-world examples include companies like Twitter and Facebook, which have announced permanent remote work policies. These organizations rely heavily on external technology solutions to support their dispersed workforces, highlighting the strategic importance of the Buy decision in their technology infrastructure. However, they also invest in developing proprietary tools for specific needs, demonstrating a balanced approach to the Make vs. Buy decision.
In conclusion, the shift towards remote work has significantly impacted the Make vs. Buy decisions in technology infrastructure. Organizations must carefully consider cost, scalability, security, compliance, and strategic alignment when making these decisions. While buying solutions can offer cost savings, scalability, and access to advanced technologies, developing in-house solutions can provide customization, control, and competitive advantage. The right decision varies by organization, depending on their specific needs, capabilities, and strategic goals.
Learn more about Operational Excellence Performance Management Competitive Advantage
Best Practices in Make or Buy
Here are best practices relevant to Make or Buy from the Flevy Marketplace. View all our Make or Buy materials here.
Explore all of our best practices in: Make or Buy
Make or Buy Case Studies
For a practical understanding of Make or Buy, take a look at these case studies.
Make or Buy Decision Analysis for Agritech Firm in Precision Farming
Scenario: An Agritech firm specializing in precision farming technologies is grappling with the Make or Buy dilemma.
Sustainable Growth Strategy for Offshore Wind Energy Firm
Scenario: An established offshore wind energy company is at a crossroads, facing the strategic dilemma of make or buy to accelerate its growth and maintain competitiveness.
Sustainability Strategy for Boutique Hotel Chain in Eco-Tourism Niche
Scenario: A boutique hotel chain in the eco-tourism sector is navigating the strategic challenge of a "build vs.
Make or Buy Decision Analysis for Luxury Goods Manufacturer
Scenario: The organization in question is a high-end luxury goods manufacturer facing challenges in deciding whether to make components in-house or outsource to third-party vendors.
Maritime Fleet Procurement Strategy for Shipping Corporation
Scenario: A global shipping company with a diverse fleet is facing challenges in deciding whether to make critical ship components in-house or to buy from external suppliers.
Telecom Infrastructure Modernization Initiative
Scenario: The organization in question operates within the telecom industry, facing the strategic decision of modernizing its telecommunications infrastructure.
Explore all Flevy Management Case Studies
Related Questions
Here are our additional questions you may be interested in.
Source: Executive Q&A: Make or Buy Questions, Flevy Management Insights, 2024
Flevy is the world's largest knowledge base of best practices.
Leverage the Experience of Experts.
Find documents of the same caliber as those used by top-tier consulting firms, like McKinsey, BCG, Bain, Deloitte, Accenture.
Download Immediately and Use.
Our PowerPoint presentations, Excel workbooks, and Word documents are completely customizable, including rebrandable.
Save Time, Effort, and Money.
Save yourself and your employees countless hours. Use that time to work on more value-added and fulfilling activities.
