Managing data efficiently has never been more important. Piecing together the right data management software infrastructure — one that is both efficient and integrated — is key to determining how companies operate, and their business options.
Since software is so central to daily business functions, most sizeable organizations have invested in robust IT departments and brought on teams of software developers to maintain their data management systems. Having in-house development resources also provides the option to build solutions from scratch when a new data management challenge is encountered.
New data management challenges are common for large organizations. Determining how to solve those challenges is often a challenge in itself, and existing development resources come to mind. But before rushing to build a new component of your data management system, it is important to ask if it is better to build, or to buy. What considerations should go into this decision?
You can determine this by asking a few key questions.
Can my organization create and maintain another in-house system?
If you want to build your own data management software, you should first take a look at your in-house resources and find out what employees and funds are available to support such a development project.
- Understand your project’s place in overall organizational priorities
- Consider the cost of hiring more employees and buying support software
- Consider ongoing maintenance to meet current and future data demands
Those who choose to build their own software must also ensure their system is secure from threats, both physical and cyber. When it comes to IT and data security, look for a solution that alleviates, rather than deepens, the burden. You should design the system so your data is inaccessible to outsiders and is fully backed up in case of system failure.
How complex is the system we envision?
Often a development project is more complex than initially planned. What seems obvious to the casual or non-user of a software system likely does not account for its overall complexity.
In general, the smaller the scale and level of complexity, the easier a system is to build. Conversely, systems that are complex and require highly specialized software are usually more cost-effective to purchase.
How prevalent is this issue within my industry?
Are your peers facing the same challenges as you, and does a similar data management software solution work for many in your industry? If so, buying an industry-leading software solution is likely the choice with the most return on investment. Software vendors have had the time, expertise, and industry experience to fully understand common challenges and build the best solution.
- Many buy-side firms and investment managers have similar data management challenges
- A best-in-class software solution used by your peers means inherent optimization of operational processes
- In addition to great software, you may also receive a variety of other industry-specific benefits
Is this fundamental to my organization’s value proposition?
When considering whether to build or buy, weigh the benefits vs. the ultimate cost.
The rationale is simple: Common industry problems like accounting, reporting, trade management, and more can be easily and effectively solved with a purchased solution. For a firm’s more specialized processes, the time, money, and inherent risk in building a custom enterprise system may be worth it.
A System that Meets Your Needs
Choosing a new component for your data management system can be a difficult process. That process is even more difficult when considering building a solution in-house. It’s important that you carefully weigh your options and consider what challenges you share with the rest of the market.
The result of a carefully curated decision is rewarding. Finding the right software solution will have innumerable benefits to your organization’s data management, including creating efficiencies, streamlining important processes, empowering talented personnel, and supporting your organization’s goals.