Making the Build or Buy Decision

[Anita Karcz]

The basic decision of build versus buy applies to many things in our personal and professional lives. The answer depends on what is involved.

In our personal lives, somehow home improvement stories always leap to mind first---for good reasons. We all know someone who decided to build (do it yourself) instead of buy (hire). The friend who did roofing in his youth who decided to fix a leak by himself, then skidded down his roof in a spectacular flourish of roof/road rash but was fortunately lucky enough to not slide over the gutters and connect with the earth. The guy in your neighborhood who decided that cutting down a 50 foot maple with a chain saw and a case of beer was a capital idea.

Making the build versus buy decision is not always straightforward as in the home improvement examples, where personal safety factors can tip the balance. Building, especially in the IT world, looks cheaper at first blush. However, to make an appropriate comparison, you need to factor in all the costs. Building reports or an application requires staff time—what is the opportunity cost in additional to hours spent? What doesn’t get done because a particular project requires a certain number of finite staff hours? When you evaluate building, don’t forget the maintenance and updating that could well require a lot more time than you think. Oh, and did we mention the extra server? Beyond these considerations, ask yourself, is this core to what we do? To use a non-technical example, a hospital would be very unlikely to contract out management of its operating rooms but is very likely to outsource food services. There certainly are pluses to building: you can customize to exactly what you want and you can control everything. But it is important to look at total costs before making a decision.

Once you make the decision to buy a service or product, there is another layer of evaluation to consider. Do you buy a software product to run in house or contract for a Software as a Service (SaaS) solution? In house software requires in house resources. The internal resources required for implementation and maintenance should be a lot less than the build option, otherwise, why are you doing it? Think about the end users of the product/service. Time and time again, technical leaders and staff assume that clinical users will run their own reports from a software package and be delighted to do it. While there may be a parallel universe where this is normal, it is unlikely to happen in our universe. So how will you create, modify and distribute reports to the stakeholders who need them? With increasing performance demands for Meaningful Use and federal Pay for Performance programs, monthly reports are no longer enough to support continuous improvement. The cycle is much shorter and data needs are much more immediate.

SaaS solutions can be more friendly for clinical users, provide frequent and easily accessible data and generally require very little from your IT staff for implementation and maintenance. A SaaS solution usually takes care of hardware and other software needed for running the solution, freeing up internal IT resources.

Anita Karcz, MD is the Chief Medical Officer at IHM Services