Build or Buy: The Framework for Smart Tech Decisions
When should you build a solution in-house vs. buying off-the-shelf? Bert and Julianna tackle real business scenarios with a research-backed decision framework you can use immediately.
Research-backed decision tree from this episode
Episode Summary
Should you build a custom solution or buy something off-the-shelf? It's one of the most common decisions facing businesses today, yet most teams approach it without a clear framework. Bert and Julianna tackle real-world scenarios from luxury hotels to trucking companies, sharing a research-backed decision tree.
From the $10/month hotel checkout app to the $500K logistics platform, they break down the core factors: differentiation value, technical complexity, compliance risk, and total cost of ownership. Plus the stories behind homegrown systems that became technical debt nightmares.
Episode Timeline
DIY vs Call the Expert
Julianna opens with the classic dilemma: "Are you a DIY or are you more of a 'I'm gonna call someone'?" The philosophy behind when to do it yourself vs. hiring experts applies to business tech decisions too.
Core Differentiation Framework
Bert's key insight: "How core and how critical is it to what differentiates me in the market?" If you're doing something no one has done before, you build. If it's well-defined, someone's already solved it.
Hotel Checkout Scenario
First case study: Luxury hotel chain needs late checkout coordination with housekeeping. $10/user/month app vs. tweaking existing scheduling tools. 220 employees, $40M revenue.
Build vs. Buy Debate
Julianna argues for building using existing scheduling systems. Bert counters with the "borrow" approach - $26K isn't much for a $40M company, and you can learn what works before committing.
Coffee Subscription System
Artisanal coffee roaster case: $2,500/year Shopify plugin vs. Excel spreadsheet management. Both hosts immediately agree: "That's a no-brainer. I'd buy that." PCI compliance makes the decision easy.
Healthcare Kiosk Complexity
Urgent care self-check-in kiosk: $250K system vs. repurposing iPads. HIPAA compliance and mixed medical records create massive complexity. "It's not worth building it for 250K."
Trucking Fleet Management
The big one: $500K/year fleet management platform vs. patching homegrown Access database. 2,500 employees, 12 states, core business competency. Vendor lock-in vs. technical debt trade-offs.
ROI and Expansion Plans
Julianna's CFO perspective: "Are operations going to expand where we can recoup 500K?" If you can add one extra stop per driver per day, that's 300,000 additional stops annually.
Technical Debt Horror Stories
Marriott's homegrown payroll system that couldn't handle changing overtime laws. "Green screens" from 30-40 years ago. Why technical debt builds up and becomes unmaintainable.
AI Changes Everything
How AI accelerates proof-of-concept development. "You're able to develop a proof of concept using AI much faster, show that the thing works and de-risk the entire operation." The future of build vs. buy decisions.
Build vs Buy Decision Tree
Follow this research-backed decision tree to make smart tech choices for your business
graph TD
A[New Tech Need] --> B{Core to Business Differentiation?}
B -->|Yes| C{Compliance Requirements?}
B -->|No| D{Exists as Off-the-shelf?}
C -->|High Risk HIPAA/PCI| E[Buy from Specialist]
C -->|Low Risk| F{Team Has Expertise?}
D -->|Yes| G{Cost Analysis}
D -->|No| H[Build Custom]
F -->|Yes| I{ROI Justifiable?}
F -->|No| J[Buy and Learn]
G -->|Buy Cheaper| K[Buy]
G -->|Build Cheaper| L{Technical Debt Risk?}
I -->|Yes| M[Build In-house]
I -->|No| N[Buy]
L -->|High Risk| O[Buy]
L -->|Low Risk| P[Build]
classDef startNode fill:#e0f2fe,stroke:#0369a1,stroke-width:2px,color:#0c4a6e
classDef decisionNode fill:#dbeafe,stroke:#1d4ed8,stroke-width:2px,color:#1e40af
classDef buildNode fill:#dcfce7,stroke:#16a34a,stroke-width:2px,color:#15803d
classDef buyNode fill:#fef3c7,stroke:#d97706,stroke-width:2px,color:#b45309
class A startNode
class B,C,D,F,G,I,L decisionNode
class H,M,P buildNode
class E,J,K,N,O buyNode
Real-World Examples from the Episode
Hotel Late Checkout System
The Scenario
- • 220 employees, $40M revenue
- • $10/user/month app vs. tweaking existing tools
- • Front desk + housekeeping coordination
- • Employee device and overtime considerations
The Decision
Julianna: Build using existing scheduling system for better integration. Bert: Buy/borrow to test and learn, then optimize. $26K isn't significant for a $40M company.
Coffee Subscription Platform
The Scenario
- • 85 employees, $12M revenue
- • $2,500/year Shopify plugin vs. Excel management
- • Recurring billing, labels, customer management
- • Credit card data handling
The Decision
Unanimous Buy: PCI compliance makes this a no-brainer. "I don't want to be in scope for PCI on that." Customer experience and security trump cost savings.
Healthcare Check-in Kiosks
The Scenario
- • 600 employees, $110M revenue
- • $250K system vs. repurposed iPads
- • EMR integration, ID/insurance scanning
- • HIPAA compliance requirements
The Decision
Leaning Buy: HIPAA complexity and mixed medical records create massive risk. "What is the lawsuit there? It's really not worth it." Explore EMR's existing capabilities first.
Fleet Management Platform
The Scenario
- • 2,500 employees, $500M revenue
- • $500K/year vs. patching Access database
- • 12 states, route optimization, compliance
- • 12-person IT team with developers
The Decision
Complex Trade-off: Core business competency + vendor lock-in concerns vs. technical debt. Need ROI analysis: Can you add stops/routes to justify $500K annually?
Key Quotes
"How core and how critical is it to what differentiates me in the market? If I'm working on something that no one has ever done before, then I'm probably gonna have to build it."
— Bert Carroll
"I don't want their credit card information being in an Excel sheet. I don't even want to be in scope for PCI. I want their insurance to handle it."
— Bert Carroll
"Are operations going to expand where we can recoup 500K? If we can add one additional stop, we have a thousand drivers - that's 300,000 additional stops."
— Julianna Fricchione
"AI gives us the opportunity to shift left on the process flow. I'm able to develop a proof of concept using AI much faster and de-risk the entire operation."
— Bert Carroll
Episode Resources
Decision Framework
Research-backed decision tree from this episode. Includes factors for differentiation, compliance, cost analysis, and risk assessment.
Download Framework PDF📚 Research Sources
- • "The Nature of the Firm" by R.H. Coase (1937)
- • "Dealing with Darwin" - Clayton Christensen (2005)
- • "Build, Borrow, or Buy" - Capron & Mitchell (2012)
- • Hatch Works Build vs. Buy Framework (2025)
- • McKinsey & Gartner analysis frameworks
💡 Decision Factors
- • Market differentiation value
- • Regulatory compliance requirements
- • Total cost of ownership (5-year view)
- • Technical complexity and maintenance
- • Team capabilities and capacity
- • Vendor lock-in and exit costs
🎯 Action Items
- • Download the decision framework
- • Audit your current "build vs. buy" decisions
- • Map your core differentiators vs. commodity functions
- • Calculate true total cost of ownership
- • Use AI for faster proof-of-concept development
Key Decision Factors
Core Differentiation
Is this capability central to what makes you unique in the market? If it's your competitive advantage, consider building.
Compliance & Risk
HIPAA, PCI-DSS, or other regulatory requirements usually favor buying from vendors who specialize in compliance.
Total Cost Analysis
Factor in development time, maintenance, upgrades, and opportunity cost. $500K/year might buy you 2-3 developers, but what else could they build?
Technical Debt Risk
Homegrown systems require ongoing maintenance. Will you keep up with security patches, compliance changes, and feature requests?
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Episode 2508 of Accelerating Humans