Choosing the right path for your next Power Platform application can be a complex decision, especially when you’re weighing the pros and cons of building versus buying. In this rapidly evolving digital landscape, organisations across all industries face this crucial choice. The right decision can lead to increased efficiency, cost savings, and a competitive edge in the marketplace. But how do you decide which route is best for your business?
In this blog post, we’re going to delve into the key factors that every decision-maker should consider when deciding between building or buying their next Power Platform application. Specifically, we’ll be using a Learning Management System (LMS) as an example to bring clarity to these points.
The main factors to consider include:
- Financial Considerations: This encompasses everything from initial costs, ongoing maintenance, upgrades, changes, and licensing.
- Vendor Qualification and Capabilities: We’ll discuss the importance of vendor size, ISO accreditation, sovereignty of data, and understanding SLAs.
- Vendor Lock-In: We will explain what vendor lock-in means, its associated risks, and strategies to mitigate these risks.
- Skills and Expertise: We’ll look into the skills and expertise needed for building an LMS system, and how to assess the skills of a vendor or consultancy.
- Security of Data: We’ll explore data security considerations, whether you’re building or buying the system.
- Integration with Other Systems: We’ll discuss the challenges and opportunities of integrating the LMS with other systems.
- Support: We’ll explore the importance of support when building or buying an LMS system.
- Updates and Maintenance: We’ll talk about the responsibilities of maintenance and updates, and how they can impact the decision.
- Additional Factors to Consider: We’ll consider other important factors such as speed to market, customisability, scalability, control over the product, and resource availability.
By the end of this post, we hope to guide you in making an informed decision on whether to build or buy your next Power Platform application. Stay tuned as we unpack these factors one by one, to help you make the right choice for your business.
Before we continue, if you’d like to learn how to build your own Learning Management system with the Power Platform, have a look at this 8-hour Workshop build where our Collab365 Coach, Connor takes you through it step-by-step:
Build A Custom Learning Management System (LMS) With The Power Platform
Understanding the Difference between Building and Buying
Before we delve into the factors influencing the build vs buy decision, it’s important to clarify what we mean by building and buying a Power Platform App. Using a Learning Management System (LMS) as an example, we will illustrate the key differences.
Building a Power Platform App
Building an app refers to creating a custom application from scratch. In the context of an LMS, this would mean developing a platform tailored to your organisation’s specific needs. This might include unique features like custom reporting, personalised learning paths, or bespoke integrations with other business systems.
The build route often requires a team of skilled developers, business analysts, and project managers. They would work together to define the app’s requirements, design its architecture, write the code, test the functionality, and deploy the final product. This process can be time-consuming and requires significant upfront investment, but it offers the benefit of complete control over the end product.
Buying a Power Platform App
On the other hand, buying an app typically means purchasing a pre-built software product or subscribing to a software-as-a-service (SaaS) solution. For an LMS, this could be a well-known platform like Canvas, Learndash or Blackboard.
When you buy, you’re getting a product that’s already been developed, tested, and used by other organisations. It may not be tailored to your specific needs, but it will likely have a robust set of features that have been refined over time. Buying an app can be quicker to deploy since you’re not starting from scratch, and it often requires a lower upfront investment compared to building. However, it may involve ongoing subscription fees and you have less control over the app’s features and capabilities.
To sum up, the choice between building and buying a Power Platform App, like an LMS, hinges on trade-offs between cost, time, control, and customisation. In the following sections, we’ll dig deeper into these factors to help you make an informed decision for your business.
Factor #1: Financial Considerations
When debating between building or buying a Power Platform App, one of the key elements to consider is the financial aspect. This includes the initial investment, ongoing expenses, and the often-overlooked but significant area of licensing costs.
Initial Cost for Building vs Buying an LMS system
Creating a custom LMS on the Power Platform can involve a substantial upfront investment. This includes the cost of development, project management, and perhaps consultancy services if your organisation does not possess the requisite expertise. There can also be infrastructure-related expenses, such as those associated with setting up and managing databases, servers, and additional technologies that your application will depend on.
On the other hand, purchasing an LMS off-the-shelf usually has a smaller initial cost. You’re generally billed a subscription fee, which could be on a monthly or annual basis, depending on the number of users. It’s important to remember that while the upfront costs may seem more manageable, they can accumulate over time, so a long-term budget perspective is essential.
Ongoing Costs for Maintenance, Upgrades, and Changes of an LMS System
With a custom-built LMS, ongoing costs for maintenance and upgrades are a factor to consider. This includes addressing software bugs, implementing feature updates, and adapting the system to changing business requirements or evolving technology trends.
When you purchase an LMS, many of these maintenance costs are included in your subscription fee. However, for changes or new features not included in the vendor’s product roadmap, you might incur additional costs.
Licensing for Building and Buying an LMS System
When it comes to building an LMS on the Power Platform, you will need to consider the costs of Power Platform and Dataverse licenses. Power Platform is licensed on a per-user basis, and the cost varies depending on the level of capabilities you need. Dataverse, the data management component of the Power Platform, has its own licensing costs as well.
When you buy an LMS, you’re essentially licensing the software. Your subscription fee allows you to use the software, but you don’t own it, and you’re typically not allowed to modify the core code. You should also be aware of any restrictions in the license agreement, such as limits on the number of users or usage limitations.
Potential Impacts of Cost and Licensing on the Decision
The costs and licensing considerations can significantly influence the build vs buy decision. For organisations with budget constraints and a need for a solution sooner rather than later, buying an LMS might be more feasible. However, if your needs are highly specific and budget is less of a concern, building a custom solution might offer more value over time.
For instance, a large corporation with unique training requirements across various departments could benefit more from building a custom LMS, despite the higher initial costs, as they can tailor the system to their exact needs and avoid ongoing subscription fees. Conversely, a small to mid-sized business with more standard training needs and a tighter budget may find more value in subscribing to an existing LMS.
Coming up next, we’ll delve into another pivotal aspect in the build vs buy decision: vendor qualifications and capabilities.
Factor #2: Vendor Qualification and Capabilities
When considering buying an LMS system, it’s crucial to carefully assess the qualifications and capabilities of the vendor. You’re not just purchasing a product, you’re entering into a relationship with a service provider. Your choice of vendor can significantly impact the success of your LMS implementation and its long-term value to your organisation.
Importance of Vendor Size When Buying an LMS System
The size of a vendor can indicate their capacity to deliver and support their product effectively. Larger vendors usually have more resources to invest in product development, support, and training. They can offer a more extensive array of features and services, which can be a significant advantage. However, smaller vendors can often provide more personalised service and may be more responsive to specific customer needs.
Significance of ISO Accreditation and What It Means for the Buyer
ISO accreditation is an important criterion when assessing vendors. ISO, the International Organisation for Standardisation, sets globally recognised standards for various aspects of business and technology. A vendor with ISO accreditation has demonstrated adherence to these standards, which can be a strong indicator of quality and reliability. For example, ISO 9001 certification relates to quality management systems, while ISO 27001 is about information security management.
Sovereignty of Data When Working with a Vendor
Data sovereignty is another key consideration. This refers to the concept that information is subject to the laws of the country in which it is located. Depending on where a vendor’s servers are situated and where they store their data, different data protection laws may apply. It’s crucial to understand these implications and ensure that the vendor complies with all relevant regulations, especially if your organisation handles sensitive information.
Understanding and Evaluating SLAs
Service Level Agreements (SLAs) are a critical part of any vendor contract. They define the level of service you can expect, including aspects such as availability, performance, and response times for support queries. Understanding and evaluating SLAs is vital to ensure that the vendor can meet your organisation’s needs and expectations.
How These Factors are Affected When Building Your Own LMS System
When building your own LMS system, these factors will differ. The size of the vendor is not a concern, as the “vendor” in this case is your own organisation. Similarly, ISO accreditation may not be relevant unless your organisation itself is ISO certified. Data sovereignty is under your control, as you determine where the data is stored. As for SLAs, these would be internal agreements within your organisation rather than contractual obligations with a third party.
Factor #3: Vendor Lock-In
Vendor lock-in is a situation where a customer is dependent on a vendor for products or services and cannot easily switch to another vendor without substantial costs, inconvenience, or technical incompatibility. This is a critical factor to consider when deciding between building or buying an LMS system.
Explanation of Vendor Lock-In
Vendor lock-in can occur in many ways. For instance, it may be due to proprietary technologies that are not compatible with other systems, long-term contracts, substantial switching costs, or the use of specific data formats that make it difficult to transfer data to another system. When you’re locked into a specific vendor, you may find it harder to negotiate terms, prices, or request custom features.
Risks Associated with Vendor Lock-In When Buying an LMS System
The primary risk of vendor lock-in when buying an LMS system is the loss of flexibility. If you’re unhappy with the service, price, or product direction, it may be challenging and costly to switch to another vendor. Also, if the vendor goes out of business or decides to stop supporting the product, you may find yourself in a difficult situation.
Strategies to Avoid or Mitigate the Risks of Vendor Lock-In
To avoid or mitigate the risks of vendor lock-in, consider the following strategies:
- Use Standards-Based Systems: Systems that adhere to industry standards are more likely to be compatible with other systems, making it easier to switch vendors if needed.
- Negotiate Contract Terms: Consider negotiating contract terms that allow for an exit strategy. This could include a clause that requires the vendor to assist with data migration if you decide to switch to another system.
- Implement a Hybrid Approach: Using a mix of in-house and vendor solutions can reduce dependence on a single vendor.
How Building an LMS System Can Impact the Risk of Vendor Lock-In
Building your own LMS system can significantly reduce the risk of vendor lock-in. You have full control over the technology stack used, the data formats, and the overall direction of the product. However, it’s essential to consider that building your own system may result in a different kind of lock-in – to your own in-house developed system. Switching from a system you’ve developed in-house to a vendor product could also involve significant costs and challenges.
Factor #4: Skills and Expertise
When deciding between building or buying an LMS system, the skills and expertise available to your organisation can be a decisive factor. Both options have distinct requirements, and understanding these can help you make a more informed decision.
The Necessary Skills and Expertise for Building an LMS System
Building an LMS system in-house requires a team with a wide range of skills. These include project management, software development, UI/UX design, testing, and data management. Beyond these technical skills, a deep understanding of the organisation’s learning needs is crucial. This includes knowledge of training materials, learning paths, evaluation methods, and user experience expectations.
Evaluating the Skills and Expertise of a Vendor When Buying an LMS System
When purchasing an LMS system, the vendor’s skills and expertise are essential to consider. The vendor should have a proven track record in developing and maintaining LMS systems. Their team should include experts in software development, data management, and customer support. Also, consider the vendor’s understanding of your industry and the specific learning needs of your organisation.
The Possibility of Using a Consultancy for Building an LMS System
If your organisation lacks the necessary skills and expertise to build an LMS system in-house, using a consultancy can be a viable option. A consultancy can provide the necessary expertise and also transfer knowledge to your internal team. However, this option can be costly and may still require significant involvement from your team to ensure the system meets your needs.
How to Assess the Skills and Expertise of a Consultancy
To assess a consultancy, look at their past projects, ask for references, and conduct interviews to gauge their understanding of your needs. It’s also helpful to understand their process, how they handle project management, and how they will work with your team.
Factor #5: Security of Data
Data security is a critical concern for any organisation and plays a vital role in the build vs. buy decision for your LMS system. Both options come with their unique sets of security considerations.
Data Security Considerations When Building an LMS System
When building an LMS system, your organisation has direct control over the security measures implemented. This control allows for custom security measures that perfectly align with your organisation’s policies and standards. However, this also means that your organisation is responsible for any potential security flaws or breaches. Your team must possess robust knowledge about data security practices and stay updated on evolving threats.
Data Security Considerations When Buying an LMS System
When buying an LMS system, the vendor’s security measures come into play. Reputable vendors typically have strong security frameworks in place and continually update their systems to respond to new security threats. However, you’ll be relying on the vendor’s vigilance and competence to safeguard your data. Make sure to understand their security policies, incident response strategies, and compliance with security standards such as ISO 27001.
Examples of Security Challenges and Solutions for Both Options
For instance, when building an LMS, one security challenge could be ensuring secure data transmission and storage. Solutions might include encryption of sensitive data and implementation of secure access controls. When buying an LMS, a challenge could be ensuring that the vendor complies with your organisation’s specific security requirements. A solution could be to include these requirements in the contractual agreement with the vendor and conduct regular audits to ensure compliance.
Factor #6: Integration with Other Systems
The ability of your LMS to integrate with other systems is another crucial factor that influences the build versus buy decision. This factor is particularly important when considering that your LMS is likely not going to function in isolation, but rather as a part of a larger ecosystem of software and tools.
Integration Challenges and Opportunities When Building an LMS System
When building an LMS, one of the challenges is ensuring it can integrate seamlessly with your organisation’s existing software. This might include HR systems, payroll software, content management systems, or other business tools. Since you’re building the system, you can tailor the integration capabilities according to your exact needs, which can be a significant opportunity.
However, it also means that your development team needs to have a deep understanding of the other systems’ architecture and APIs. Additionally, building custom integrations can add to the development time and cost.
Integration Challenges and Opportunities When Buying an LMS System
On the flip side, when buying an LMS, you’re largely dependent on the vendor for integration capabilities. While most modern LMS vendors provide robust integration options with common business tools, there can be limitations, especially for proprietary or less common software.
An opportunity here is that vendors often provide support and documentation for integrations, reducing the burden on your internal team. However, in case the vendor doesn’t support a necessary integration, you might have to resort to workarounds or additional third-party tools, which can add complexity and cost.
Example Cases Where Integration Has Been a Decisive Factor
For instance, a company that heavily relies on a specific HR system might favour an LMS that provides a seamless, out-of-the-box integration with that system. On the other hand, a company with a custom, in-house tool might lean towards building their own LMS to ensure perfect integration.
Factor #7: Support
Support is an essential aspect to consider when deciding whether to build or buy your next LMS. The quality, availability, and cost of support can greatly influence the overall user experience and the success of your learning initiatives.
Support Considerations When Building an LMS System
When building your own LMS, the responsibility for support lies primarily with your internal team. This means that your team will need to have the necessary skills and resources to troubleshoot issues, provide user assistance, and handle updates and maintenance.
While this allows for potentially faster issue resolution and a more personalised support experience, it can also add to the workload of your IT department and pull resources away from other initiatives. It’s also important to remember that providing support can become more challenging as the user base grows or if the system becomes more complex over time.
Support Considerations When Buying an LMS System
When buying an LMS, vendor support is typically part of the package. This can include technical support, training, maintenance, and sometimes even dedicated account managers.
The quality of vendor support can vary greatly, so it’s important to do your due diligence when choosing a vendor. Look for vendors that offer comprehensive, 24/7 support, and have a good reputation for customer service. Remember, however, that premium support services can come at an additional cost.
The Role of Support in the Build vs Buy Decision with Examples
Consider the example of a small organisation with a limited IT department. In such a scenario, buying an LMS with comprehensive vendor support could save the organisation a great deal of time and effort. On the other hand, a large enterprise with a robust IT department might prefer to build their own LMS, as they have the resources to provide in-house support and wish to maintain full control over the process.
Factor #8: Updates and Maintenance
Keeping an LMS up-to-date and well-maintained is key to its longevity and effectiveness. This includes not only technical updates but also content updates, user management, and more. Let’s delve into the different considerations for building vs buying an LMS system when it comes to updates and maintenance.
Maintenance and Update Responsibilities When Building an LMS System
Building your own LMS means that your team has total control over updates and maintenance. You can decide when to update, what to update, and how to execute it. This allows for a high degree of customisation and flexibility.
However, this also means that your team is solely responsible for keeping the system running smoothly and dealing with any technical issues that arise. It requires an ongoing commitment of resources and time. There’s also the risk of “technical debt” – the cost of additional rework caused by choosing a quick and easy solution now instead of using a better approach that would take longer.
Maintenance and Update Responsibilities When Buying an LMS System
When you purchase an LMS, updates and maintenance are typically handled by the vendor. They ensure that the system stays up-to-date with the latest features and security patches. This can be a great advantage, as it allows your internal team to focus on other tasks.
However, you have less control over the update process. For instance, updates may come at inconvenient times, or new updates might change features that you and your users have gotten used to. There’s also the risk that the vendor might stop updating the product or go out of business.
Examples of How Updates and Maintenance Can Impact the Decision
Consider a company that operates in a highly regulated industry such as healthcare. They might prefer to build their own LMS to ensure they can immediately implement any changes required by new regulations. On the other hand, a small business without a dedicated IT department might prefer to buy an LMS, so they don’t have to worry about the technicalities of updates and maintenance.
Additional Factors to Consider
While we’ve discussed a lot of the major factors in the build vs buy decision, there are other considerations that can be equally important, depending on your specific situation. Let’s take a look at some of these additional factors.
Speed to Market
The time it takes to get your LMS up and running can be a crucial factor. When you build your own LMS, it can take a considerable amount of time to develop, test, and launch the system. On the other hand, buying an LMS can be quicker, as you’re acquiring a ready-made solution. For example, a startup company might opt to buy an LMS to meet their immediate needs and switch to a custom-built solution once they’re more established.
Customisability
Customisability is another important aspect to consider. A built LMS gives you the freedom to create a system that fits your unique needs perfectly. However, it requires significant time, effort, and skills. When buying, you might find an LMS that fits most of your needs but may lack some specific features or have some that you don’t need. For example, a university might prefer a custom-built LMS to accommodate their specific course structure and student evaluation system.
Scalability
Scalability is the ability to handle an increasing amount of work in a capable manner or to be enlarged to accommodate growth. When building an LMS, you need to design it with future growth in mind, which can be complex and challenging. In contrast, many bought LMSs are built to be scalable, though there may be additional costs as you scale up. For instance, a rapidly growing company might prefer a bought LMS to easily manage their increasing user base.
Control over the Product
Control over the product is another aspect where building an LMS has an advantage. You own the product and can decide its direction. With a bought LMS, you’re dependent on the vendor for updates and changes. For example, a company with a specific vision for their learning and development might choose to build their own LMS to maintain control over its evolution.
Resource Availability
Lastly, the availability of resources – time, skills, money – can significantly sway your decision. Building an LMS requires a significant investment of all these resources. Buying, while also requiring resources, can often be less intensive, especially in terms of time and skills. For example, a small business with limited IT resources might opt to buy an LMS rather than invest in building one.
How to Make the Right Choice for Your Business
Now that we’ve explored a multitude of factors in the build vs. buy decision for an LMS system, let’s bring it all together.
Recap of the Factors Discussed
We’ve discussed a wide range of considerations, including financial aspects, vendor qualifications and capabilities, the risk of vendor lock-in, necessary skills and expertise, data security, system integration, support, updates and maintenance, and additional factors like speed to market, customisability, scalability, control over the product, and resource availability. Each of these elements holds its own weight in the decision-making process, and the importance of each may vary based on your specific context.
Guidance on How to Weigh the Factors
The weight you give to each factor depends largely on your unique business context and needs. For instance, a startup with limited resources may prioritise cost and speed to market, while a large corporation may place more emphasis on customisability and control over the product. It’s vital to have an in-depth understanding of your organisational needs, resources, and long-term goals before making a decision.
Consider Both Short-term and Long-term Impacts
Another important aspect is considering both the short-term and long-term impacts of your decision. While buying an LMS might be a quicker solution with lower initial costs, building an LMS could provide greater flexibility and control in the long run. Think about where you see your organisation in the next few years and how your decision will impact your ability to reach those goals.
Final Thoughts and Takeaways for Decision-makers
The build vs. buy decision isn’t a one-size-fits-all situation. It’s a complex choice with multiple factors to consider. The best approach is to thoroughly evaluate your specific needs, resources, and future plans. Engage with stakeholders, gather input from potential end-users, and don’t hesitate to seek expert advice if needed. Whether you decide to build or buy your LMS, the goal is the same: to provide an effective and efficient learning management solution that aligns with your business objectives.
If you’d like to learn how to build your own Learning Management system with the Power Platform, have a look at this 8-hour Workshop build where our Collab365 Coach, Connor takes you through it step-by-step:
Build A Custom Learning Management System (LMS) With The Power Platform