To Build or Buy: The Utilities’ Dilemma
In the drive to integrate new mobile capabilities into their business, utilities face the choice of building or buying the right software solution to improve field operations. This is a critical decision to get right. According to a McKinsey survey in 2018, only 14% of business executives say their digital transformation efforts have made and sustained, performance improvements.
Building solutions is a serious commitment, requiring dedicated long-term resourcing, specialised expertise and a ring-fenced team to do the work. In Fyld’s view, there are five major considerations to be addressed before pushing the button.
Utility companies typically have complex legacy IT environments that can hamper innovation, since integrating with them can a significant point of consideration. It is why, historically, utility companies have built many of their own applications. Building solutions to sit on top of these legacy systems can be a complex and timing consuming process. However, current business systems should not be a barrier to innovation, agility and growth. Today, it’s far more of a level playing field: standalone native mobile applications are far more easily integrated into current systems – safely and cost effectively.
Time to market
Most would agree that the utilities sector has been slower to adopt digital technologies than other industries. However, there is a new drive to improve productivity and lower operational costs, which requires faster and more urgent change. Organisations need to decide if they can wait the months (or possibly years) it takes to get internally-built solutions into the hands of end users; or choose a solution which can be pre-configured out of the box to accelerate time to market and time to value. It really comes down to this: does the utility have an immediate need for the software, or do they have time to develop it in-house? The pressures and demands from regulators, investors and would suggest it’s the former rather than the latter.
Maintenance and support
It’s widely accepted that software maintenance consumes the majority of the lifetime costs of a software system, with estimates varying from 50-70%. This includes corrective maintenance, adaptive maintenance and enhancement costs to match changing business needs. Organisations should know they have the budget and resources to cover these costs. An in-house system carries the risk of getting locked into a labour force that support the software; whereas vendors have the experience and capabilities to deliver support services cost effectively. An often overlooked additional cost is user support for bugs, user issues, user queries etc., which would otherwise be handled by support teams of the chosen software solution.
Whilst every business is unique, it’s not always the case that specific internal business requirements will rule out the purchase of an off the shelf solution. Typically, in-house systems are narrowly focused on a specific task, and this can lead to mobile workers having to use, and learn, a number of different internally-built systems. Comprehensive mobile development is something of a niche area, and development – specifically to meet the needs of utilities – requires unique skills and a sound understanding of requirements. Whilst it could be argued that a bespoke solution built with the very specific use cases of an individual company would be the best path forward, in reality the proliferation of digital solutions in market is forcing software vendors to develop vertical specific solutions with industry specific use cases being front of mind. This approach means that an off-the shelf solution like Fyld, which was built for utilities specifically, will likely provide 80% of the functionality needed. Clients then have the option of requesting further customisation or assessing how much additional value the remaining 20% would deliver and whether that would merit the cost and time of bespoke development.
The User Experience (UX)
Building apps or websites is all about delivering the simple, intuitive experience that users have come to expect from mass adopted applications. It can be the difference between adoption of a solution or rejection and low usage – a particular challenge in the utilities sector where there’s an aging workforce. In developing an internally-built solution, the company would need to consider if it has the right skill sets to build these solutions in house and also has the cultural approach to development needed.