Digital transformation in the water industry is accelerating at a remarkable pace. As utilities and engineering firms look for data management solutions, the issue of whether to build your own applications on a cloud data platform or pay for applications developed by others, becomes increasingly relevant. XiO was recently approached by a large Texas-based utility in the process of implementing their own in-house cloud data services platform. While most water utilities in the US don’t have the resources to attempt such an implementation on their own, it is worth examining the pros and cons related to the build vs. buy decisions organizations often face.
Building Your Own Applications And Cloud Data Platform
Customization. When you build your platform, you can tune it to your exact business requirements.
Ownership and Control. You have complete control over the release schedule, features, security, and updates.
Intellectual Property. Some of the applications may have market value. A large utility in Spain has several spin-off companies that commercialized the IP generated by their parent.
Time and Resources. Development projects are known to take on a life of their own and can drain resources and cost much more than people bargain for.
Expertise. To complete a successful cloud-based software project, you need skilled professionals in various domains. These include user-experience designers for the user interfaces, front- and back-end developers, and full-stack developers for all the software features and experts on the cloud platform you plan to use. It would help to have security experts and good operational staff to keep the systems running.
Maintenance. Software always requires bug fixes, feature enhancements, and security patches. Add to that configuration management and source control.
Purchasing Applications Developed By Others
Speed of Implementation. There are many ready-to-use applications for quick deployment and integration. XiO’s gateway devices can securely extract data from existing SCADA systems and PLCs and provide complete cloud integration in a week or less.
Expertise. We have dedicated designers, software engineers, product managers, security experts, and DevOps staff to do all the heavy lifting associated with development and cloud deployments. Our customers leverage this expertise.
Cost-effectiveness. The initial costs are typically lower than building solutions from scratch. Since XiO provides similar services to many water and wastewater utilities, we can amortize our development costs over many users.
Limited Customizations. The platform implementation may only sometimes perfectly align with your specific needs.
Vendor Dependency. Users must rely on the supplier’s roadmap and the support structures they have in place.
Integration Challenges. Sometimes the vendor tools make integrating a new solution with existing systems challenging.
What To Consider Before You Begin
Do a detailed analysis of the financial implications of building vs. buying. Consider opportunity costs, internal rate of return, and expertise needed to complete a project.
Consider hidden factors like development costs, ongoing maintenance, licensing fees, staff training, and cloud platform costs.
Risk Assessment and Mitigation
Identify the potential risks with both building and buying options. When you build it, you own it and are on the line for maintenance for an extended period.
Plan and discuss strategies to mitigate these risks. Interview other customers for the “Buy” option and perform a proper due diligence process. Plan for a phased implementation and agile development processes for the “Build” option.
Long-term Scalability and Future Proofing
Examine how each option supports your utility’s growth over time.
Consider the importance of choosing a solution that can adapt to evolving technology needs. Given their competitive environment, cloud vendors have a big incentive to keep their technologies current.
Finally, create a decision-making framework that balances business needs, available resources, and risk tolerance for your utility. XiO offers a hybrid cloud model that combines vendor-supplied solutions and in-house customization to provide the best outcome.