Comments on: Decide go / no-go before buy vs. build

By: Lena

Lena — Thu, 12 Mar 2009 16:09:44 +0000

Also depends on whether the company has the work force to carry out the build itself

By: David Locke

David Locke — Tue, 03 Mar 2009 00:15:57 +0000

When you position your technology as disruptive or radical, the make or buy decision is eliminated. You will end up making, as you will drive adoption with the making. Buying will create a competitor. You will eventually need a competitor, so maybe buying at a point before that isn’t a bad idea. Still, it is a very long road with revenues to be had along the way. Stick with “make.”

As for the go/no go when you do not yet have a market to provide you with a reality to measure, find a client, and measure their vertical. If the vertical is too small, say no go, or reframe and redefine the vertical, but get to a large enough vertical before you go. At that point, the numbers will drive the same analysis that you would do for sustaining or continuous innovation.

You cost structure should be smaller in the disruptive case. If not, put the commercialization effort in its own company with its own cost structure and policy base. Then, evolve. Do the analysis with your newly reframed cost basis. Don’t pay for common services. Don’t contribute to the parent. Otherwise, your smaller cost basis is just an analytical mirage.

By: Ken Pomper

Ken Pomper — Wed, 18 Feb 2009 21:28:04 +0000

Good point, but maybe the headline should be “Don’t Let Build/Buy Decision Color Your Evaluation of the Market Opportunity” because you need both good, cold-blooded data for the numerator and denominator of ROI. If that is true, you can work on both in parallel if doing so is more efficient.

By: Derick Workman

Derick Workman — Wed, 18 Feb 2009 18:58:10 +0000

This is an important portfolio management decision. I think there are two steps. First we need to identify market opportunities based on market needs or demand. I agree with you that this should have nothing to do with buy/build analysis. Once the market opportunity is defined for a product idea, then I think buy/build decisions are important to help with the ROI analysis and determine if a business opportunity exists for your organization to solve this market need. Without knowing how well aligned the product idea is to your core-competencies or how feasible it is technically it is hard to determine if their is a business opportunity. For this go/no go gate there are typically five types of selection criteria used: Market Attractiveness, Strategic Alignment, Core-Competency Alignment, Technical Feasibility, and Competitive Advantage. These criteria combined help to identify the product ideas that have the best business opportunity, in that they are aligned to longterm strategy and core-competencies, they are attractive to the market place (demand exists), they are technically feasible, and they provide you with a competitive advantage.

By: Dr. Jim Anderson

Dr. Jim Anderson — Mon, 16 Feb 2009 23:58:13 +0000

Jeff: you touch on a key point: long-term product strategy. The product that you are considering offering to your customers today (iPhone) is really just a stepping stone to the product that you really want to offer to them tomorrow (iPhone 3G). Sometimes you just have to do whatever it takes to get that first product out there, because the real payoff is when you roll out the next product. - Dr. Jim Anderson The Business of IT Blog "Discover The Secrets Of Making Your IT Department An Indispensable Profit Center"

By: Worth The Read « i need a reality check

Worth The Read « i need a reality check — Sun, 15 Feb 2009 16:15:30 +0000

[...] The Read Posted in worth the read by josh on February 15th, 2009 Decide go / no-go before buy vs. build Unfortunately, sometimes good product ideas can get stopped in their tracks because of a feeling [...]