• Skip to primary navigation
  • Skip to main content
  • Skip to footer

PropelGrowth

Human-to-human social sales training

Menu
  • Home
  • Who We Are
    • Why PropelGrowth?
    • Management Team
    • Acumatica Marketing Team
    • Privacy Policy
    • Close
  • What We Do
    • Marketing Strategy
      • Buyer Personas
      • Strategy Development
      • Acumatica Partner Marketing
      • Integrating PR
      • Creative Design
    • Marketing Programs
      • Content Marketing for the Buying Process
      • Content Marketing Programs
      • Thought Leadership In The Buying Process
      • Thought Leadership Programs
      • Lead Generation and Lead Nurturing
      • LinkedIn Sales Prospecting
      • Marketing Coaching Program
    • Marketing Content
      • Marketing Automation
      • Email Marketing
      • Website Content
      • Blogging and Article Marketing
      • Case Studies
      • White Papers and E-books
      • Research Studies
      • Live and Online Events
    • PropelGrowth LinkedIn Prospecting Mastery course
    • Close
  • Who We Do It For
    • Who We Serve
    • Client Case Studies
      • What This CEO Learned From Buyer Persona Research Transformed Her Company
      • Close
    • Close
  • Resources
    • Sales Resources
      • Solving the No Decision Problem
      • Close
    • Marketing Resources
      • B2B Lead Conversion Rates
      • Close
    • The TrendSpotters Podcast Series
    • Close
  • Blog
  • Contact
    • Close

To Buy Or To Build, Is That The Right Question?

By Candyce Edelen

PropelGrowth Blog
Financial services technology companies are often faced whether to "build or buy" or "build and buy".I’ve been working on a buy vs. build white paper for Progress Software this week. It’s focused on the decisions that senior financial technology executives face every time they need to deliver new functionality or systems to support their business. I thought I’d share some observations gained while doing the research for this piece. Some will be pretty obvious; others might come as a surprise. I’d love to hear your observations and feedback, so comments are encouraged!

Build or buy is never a simple binary choice

Except for small sell-side firms and buy sides with little or no in-house development talent, the buy/build decision is rarely, if ever a simple binary choice. Even firms with a clear in-house build bias tend to buy certain portions of the infrastructure and software, where it doesn’t make sense to re-invent the wheel. In fact, I focused the white paper on the decision continuum.

Small firms and buysides often buy

Small firms that lack development resources almost always end up buying pre-packaged software, a need that hedge fund service providers, packaged software providers and sell-side shops have effectively leveraged for years.

“Not invented here” shops shoot themselves in the foot

In some cases, I think the “not invented here” technology departments shoot themselves in the foot by building custom technology to deliver functionality that is relatively commoditized. Wouldn’t it be better to focus your hotshot development teams on the functionality that really differentiates the business instead of reinventing wheels?

Ultra low latency HFT players build everything

Of course, there are firms out there who even design their own hardware. Those firms are generally technology houses that do trading, rather than trading houses that rely on technology. Years ago, I talked to a prop firm that was customizing the firmware on all their routing and switching technology. I assume that this is a fairly standard approach today for the ultra-low latency high frequency trading shops.

Secret sauce vs. commoditized infrastructure

As we all know, keeping the “secret sauce” secret is a common motivator for building in-house. But that doesn’t necessarily mean that you can’t leverage pre-packaged components to build an in-house system, allowing the team to focus on that secret sauce instead of building infrastructure.

Many systems in the trading workflow are commoditized

Let’s face it, market data feed handlers, FIX engines, smart order routers, matching engines, message buses, order management systems, and pricing aggregators are no longer “secret sauce.” These systems are commoditized, and unless you’re focused on ultra-low latency, it rarely makes sense to build them in-house.

Problems with Offshoring

When firms try to leverage offshore resources to build specialized functionality, they sometimes end up with disappointing results. I’ve long suspected that part of this is a cultural issue. American and European firms tend to expect financial technology developers to think for themselves and apply what we might call “common sense” in this country. But that doesn’t necessarily translate to other cultures. It’s my understanding that universities in some countries train developers to code exactly to the specs.

An Indian friend of mine told me a story that illustrates this. He was given a project in school to code a system based on a spec in the text book. He followed the instructions, but the code didn’t work. So he fixed it, got the app running, and turned in his assignment. His teacher gave him an “F” because he didn’t conform precisely to the specification in the textbook. I realize this is a gross generalization. Also, the incident he described happened about a decade ago, and things have changed radically in recent years. But nevertheless, cultural issues do affect the success of projects, and the more specialized the functionality, the more critical the impact.

Risk of single purpose applications

There is a huge problem in the industry with applications that are built for a single purpose. While these purpose-built applications are faster and cheaper to deploy up front, they are often rigid and hard to evolve as the market changes. Most banks are dealing with a hodge podge of siloed applications that are not documented, hard to support, and that drive up ongoing maintenance costs.

Ongoing software support costs

Business cases justifying in-house builds rarely do a thorough analysis of ongoing software lifecycle costs. But Mark Lutchen, former global CIO of PricewaterhouseCoopers, now head of the firm’s IT Effectiveness practice says, “70 percent of software costs occur after implementation. A rigorous lifecycle analysis that realistically estimates ongoing maintenance by in-house developers often tips the balance in favor of buying.” Here’s an interesting InfoWorld article on the topic.

Little content helping with build or buy decisions

There is remarkably little content out there targeted at helping the senior technology executives in the financial industry make buy/build decisions related to trading, surveillance, compliance and risk management software for the financial services industry (at least that I could find via Google). I found this surprising, given the fact that every financial institution faces these kinds of decisions on a recurring basis. Providing content like this, written from a neutral point of view, can be very helpful and can position your firm as a trusted advisor.

Much of the content I did find was actually just thinly veiled sales pitches. Financial technology white papers are marketing tools and need to deliver an ROI. But your readers will immediately see through advertorials and won’t trust the content. So be careful.

  • Author
  • Recent Posts
Connect
Candyce Edelen
CEO at PropelGrowth
Candyce is the founder and CEO of PropelGrowth. She brings more than twenty years of experience in managing technology companies and has founded four companies prior to PropelGrowth. For the past ten years, Candyce has focused exclusively in the capital markets industry, launching two financial technology companies. Now, she helps financial technology vendors improve their marketing strategy, publish compelling content, and drive revenue through marketing and sales enablement. Contact Candyce at +1 970-300-2280.
Connect
Latest posts by Candyce Edelen (see all)
  • 4 Steps to Optimize Your LinkedIn Profile for Sales Prospecting
  • The Reality of Cold Calling for B2B Sales
  • Can Inbound Marketing Generate Enough Leads?

Filed Under: Capital Markets, PropelGrowth Blog Tagged With: financial services industry, financial technology, trading technology

About Candyce Edelen

Candyce is the founder and CEO of PropelGrowth. She brings more than twenty years of experience in managing technology companies and has founded four companies prior to PropelGrowth. For the past ten years, Candyce has focused exclusively in the capital markets industry, launching two financial technology companies. Now, she helps financial technology vendors improve their marketing strategy, publish compelling content, and drive revenue through marketing and sales enablement. Contact Candyce at +1 970-300-2280.

Company Profile

PropelGrowth helps companies improve their marketing and sales. We start with in-depth buyer research. Then we develop a marketing and sales strategy and customer-centric messaging. Then we coach your team and help you execute on the strategy by developing thought leadership programs, content for every stage in the buying process, sales collateral, and tools to help buyers buy.

Figure out why and how your buyers buy

Develop a customer-centric marketing strategy

Get coaching from a senior marketing strategist

Recent Posts

  • 4 Steps to Optimize Your LinkedIn Profile for Sales Prospecting
  • The Reality of Cold Calling for B2B Sales
  • Can Inbound Marketing Generate Enough Leads?
  • How to Fill Your Sales Pipeline Using LinkedIn for Prospecting
  • Tips from 8 ERP Resellers on How to Leapfrog Your Competition​
  • How to Win 74% of Your ERP Deals
  • Buyer Persona Research, the Key to Niche Marketing
  • 8 Ways a Niche Strategy Improves the Value of Your Practice

Connect With Candyce

View LinkedIn profile Follow on Twitter 

Connect With Phil

View LinkedIn profile Follow on Twitter 

Company Address

3209 Glacier Creek Drive
Ft. Collins, CO 80524
+1 970.300.2280

  • Home
  • Who We Are
  • What We Do
  • Who We Do It For
  • Resources
  • Blog
  • Contact
  • Search

Copyright © 2022 PropelGrowth LLC · Designed by Phil Donaldson

  • Home
  • Who We Are
    • Why PropelGrowth?
    • Management Team
    • Acumatica Marketing Team
    • Privacy Policy
    • Back
  • What We Do
    • Marketing Strategy
      • Buyer Personas
      • Strategy Development
      • Acumatica Partner Marketing
      • Integrating PR
      • Creative Design
      • Back
    • Marketing Programs
      • Content Marketing for the Buying Process
      • Content Marketing Programs
      • Thought Leadership In The Buying Process
      • Thought Leadership Programs
      • Lead Generation and Lead Nurturing
      • LinkedIn Sales Prospecting
      • Marketing Coaching Program
      • Back
    • Marketing Content
      • Marketing Automation
      • Email Marketing
      • Website Content
      • Blogging and Article Marketing
      • Case Studies
      • White Papers and E-books
      • Research Studies
      • Live and Online Events
      • Back
    • LinkedIn LeadGen Master Class
    • Back
  • Who We Do It For
    • Who We Serve
    • Client Case Studies
      • What This CEO Learned From Buyer Persona Research Transformed Her Company
      • Back
    • Back
  • Resources
    • Sales Resources
      • Solving the No Decision Problem
      • Back
    • Marketing Resources
      • B2B Lead Conversion Rates
      • Back
    • The TrendSpotters Podcast Series
    • Back
  • Blog
  • Contact
  • Search
    • Back