ETRM Systems: Build vs Buy and What to Consider

Sterling Carmean
November 20, 2023


Howard: Let's take a little shift here. I think a lot of companies are looking for the perfect system and maybe not seeing something that suits their needs and deciding to build their own. So, we have this ‘build’ versus ‘buy’ question out there when it comes to systems. When a company is looking at this option of build versus buy, maybe what should they be considering?

Sterling: I've spent time, interestingly, on all three of the sides. On the one hand, I've worked with a vendor and been part of a software creation and delivery team. I've worked on the client side, having to receive that software, having to deal with the kind of constant application advancements of the business and, from an IT standpoint, trying to keep up with them on. I've worked on the consulting side to try to bring both a vendor product and a customer need to be able to bridge those things together with solutions. So, this is an interesting item and an interesting question to me. I think that it's really a question of the mentality and what is the culture of that organization in order to decide – are you prepared to build or buy?

Maybe a question I would ask just as a summary statement if someone's watching this thinking, ‘Should we build or buy?’ is to ask – do you want to be a software creator or a customer? Let's describe what those two worlds look like a little bit.

In the world of a software creator, I love technology. I don't mind being a technology guy because I enjoy it, but I can appreciate not everyone does. You're going to need to either be a deep technology individual or have a culture of that where you, as an organization, see a competitive advantage to the technologies that you all utilize.

So, if you're looking around your shop and thinking, man, I can point to a couple of examples where we were bleeding edge. Then, maybe you do have a culture of rapid technology adoption. You're interested in staying at the forefront.

But then let's evaluate the world of a customer. The world of a customer is focused on finding their advancement and their advantage, I should say. If their business is perhaps more on a commercial side and they don't see the value of the investment from a creator standpoint that would necessitate [purchasing an ETRM system]. So, they just need someone to help [them].

We joke all the time using plumbing as an example. I just need somebody to come in and help me put in this faucet, please. I just need that faucet to work. It just needs to be there. I have other things to do in the house, but the faucet is not my focus. I just need to get that thing working.

So, if that's a little bit more of your culture or your narrative, I think that probably a customer worldview would be an appropriate one. I will say, certainly, we could probably talk about that question for 15 or 20 minutes. There's a lot to dig into there.

But both sides have been done successfully in the past. And frankly, both sides have struggled in the past. So, it's not ‘Hey, I just want the one hundred percent success path. Tell me whichever one of those it is.’ It's certainly more nuanced than that.

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