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Software investment projects in financial markets organisations almost always include a ‘buy vs build’ decision: whether to buy – to purchase an off-the-shelf solution from a third-party vendor, or to build – to design and develop proprietary software in house. As there are arguments for and against both approaches, it is not uncommon for this to be one of the harder questions to answer when it comes to introducing or replacing platforms and applications in the financial services. However, a new approach is emerging that combines the advantages of both buy and build strategies by leveraging ready-made components that can accelerate the development of bespoke software; the buy-to-build approach.

Planning projects and implementing new software in large financial organisations can be extremely complex. As well as having to choose a solution that best fits the functional requirements of the project, it is very often the case that there are multiple additional restrictions and requirements imposed on project leads and sponsors. Established vendor relationships in the wider ecosystem of the firm must be considered and approving and onboarding a new vendor partner typically requires a long lead time. Additionally, the software implementation itself – whether bought or built – can be an arduous and drawn-out process confined by governance structures, the architecture already in place and the regulatory environment. Even with an ostensibly simple vendor selection exercise, there is very frequently an internal buy vs build assessment exercise required prior to (or in parallel with) the external vendor comparison process, which adds time and cost to projects. If not handled carefully this decision can divide business and IT teams and lead to frustration from talented (but stretched) resources.

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