The Case Against Building Tech Internally

Written by Amith Nagarajan on July 5, 2017

For most associations, doing business as usual is no longer an option, and the world is becoming much more competitive. Generating revenue from non-traditional sources has become integral to an association’s success, and we must use advanced and innovative tech solutions to meet these needs.

Despite our being in an era that demands novelty and greater flexibility, it is important that we think about our association’s true strengths: we must respond to the demands of the contemporary business environment by increasing focus on what associations can actually be world-class at. Usually, that is not the development and maintenance of technology. Rather, associations should be masters of using and connecting technology to suit their needs. There are cases where an association may have a core strength around tech, but it is increasingly rare. More to the point, I believe having a core strength in building tech within an association is unnecessary these days. Being an expert at building technology isn’t required in 2017. What you do need to do is become an expert at adapting your culture and business model, and squeeze every ounce of benefit from each piece of tech available to you.

A recently published article that contemplated the benefits of building your own technology struck a chord with me for this reason. While the “build vs. buy” decision has been an ongoing topic for associations for decades, I believe that we are well past the point where most associations should be spending time thinking about this. Particularly as technology becomes more complex, and as more opportunities to integrate new abilities such as advanced Artificial Intelligence become available, associations have to be careful not to weigh themselves down with projects far removed from their area of expertise. Even with traditional database and web applications, attracting and retaining in-house talent to build and maintain these technologies has been a challenge for almost all associations.

A key statistic to think about: it is well known in the software development world that 80% or more of the total cost of ownership of a piece of technology lies in the post-go-live maintenance costs. That means, for each dollar you spend to build something, expect to spend four more dollars over the lifetime of that technology element to maintain it. That does not include major advancements in the application either, it means just keeping it up to date, fixing defects, and running it in the cloud.

Are associations well positioned to be focused on developing core technology? In most cases I believe the answer is a very strong no.

So, what should associations do to get themselves well positioned to excel in a tech-driven era of engagement? My view is that associations need to have expertise at integrating a variety of technology components and adapting their business model to drive change. Here are some examples:

Core Business Apps

My view is that the days of monolithic and “do everything” apps are going to give way to a very different future. A pendulum has swung back and forth for years between “best of breed” and “integrated suites” and each era of computing has brought the two camps closer together because it becomes easier with each generation to connect apps. These days with a wide array of excellent association-specific and generic business apps, connected by APIs and by tools like Zapier, Microsoft Flow, and even IFTTT, you can spend your time connecting apps and workflows to drive a new way of doing business without touching a line of code or creating new apps from scratch.

Chatbots

Natural Language Processing (think Siri and Alexa), and Machine Learning have improved markedly in the last few years and are capable of answering the most basic inquiries once wired up to your content and database. The net effect of this is to improve your responsiveness to member needs while also reducing your cost per interaction.

Intelligent Content Curation

This area is a personal passion of mine – using Deep Learning methods to find the best content from the web and bring it to your members and completely disrupt the traditional engagement pattern that is focused on just your own content and offerings. The technologies are available today to do this in a very compelling manner. My company, www.rasa.io is but one of the ways to go about doing this. Having spent a few years developing the AI to do this, I can tell you that most associations would not be well served attempting to brew this in-house.

Mobile Apps

Yes, everyone wants a mobile app. Off the shelf, brandable mobile apps for a variety of needs are out there, so you could use those. You could also mashup a variety of ideas to bring a centralized self-service app to your members, but why build that yourself? There are plenty of vendors who do this all day every day and have methodologies and a mix of on-shore and off-shore expertise whose cost is unlikely to be matched.

In Summary

I’m not suggesting that there is never a case where an association should build a new piece of technology. There are always situations where some groups are outliers and this would make sense. But, in 2017, for the overwhelming majority of associations, including those that have very large technology budgets, building custom code in house is usually the wrong move. Doing that creates a near-instant “legacy” environment that you have to spend most of your energy and money on maintaining instead of spending time thinking about using the latest tech to drive disruption.