Arriving at the buy or build decision while opting for a new technology stack depends on the time and resources available with the enterprise.
Purchasing an off-the-shelf customer engagement platform (CEP) does mean incurring known costs like initial setup, deployment, and license fees. Still, in the long term, they are estimated to be far lower than the cost of building and maintaining a CEP, which usually comes with implicit costs encountered during or after the building phase.
Six concealed costs that tilt the scales in favour of buying a pre-built CEP
Escalating maintenance costs
While building a platform, companies need to consider the elephant in the room: maintenance cost. All AI-based customer engagement platforms need constant upkeep and modification to stay in line with customer support in the organization. Failing this will lead to inflexibility due to a legacy Martech stack, siloed operations leading to high reliance on human intervention, missed market opportunities due to lack of proper functionalities or a need to explore new technology frequently.
Scaling up is nearly impossible without paying for these frequently occurring maintenance costs. These costs become prohibitive if enterprises choose to build the stack in-house. Estimates say companies must allocate between $10,000-$25,000 per year on platform upkeep.
Continuous compliance costs
The new regulatory scenario requires stringent compliance from enterprises. They must continuously adjust their practices to adhere to regulations like GDPR (Europe), CCPA/ADA (US), PCI and HIPAA. These certifications ensure customers that the platform has highly developed systematic management of sensitive information.
Stretched time to value
The cost of running the platform at full throttle increases with complexity and full functionality. A DIY tech stack involves multiple decision-making and may have unforeseen hurdles that delay the building process, which costs time and money before the platform starts yielding results. The waiting period between the start of development and final production has a cost attached that could stretch incurring costs.
Increasing training costs
If the stack is built internally, it dictates mandatory investment in internal training of human resources. Experience has shown that technology teams have high turnover rates and get disbanded very often, leading to a continuous training and development process. In addition, companies must provide a stand-in team ready to take charge of maintenance. This escalates the average employee recruitment and training cost, which could exceed $4,000 annually.
Rising technical debt costs
Companies must also consider the technical debt issue while building an in-house solution. This is a cost because of code changes and overheads like storage and infrastructure. In addition, there is the cost of system integration, causing delays in implementation that impact the overall RoI.
Upsurge in strategic costs
In a changing business environment, brands need to swivel and change their strategy and invest more time and money into the platform. Companies seeking a competitive advantage in the market must account for strategic costs on top of their current technology, maintenance and training costs. Interestingly, only 34% of the companies seek this first-mover advantage, giving them a huge competitive edge in the market.
Conclusive factors to help make the choice
Building an in-house customer engagement platform from scratch – the modern-day thinking tool for marketers – might seem like an exciting tech proposition for a company. But it would be better to pause and make an informed decision based on both upfront and the hidden costs in the build or buy decision. The reason is that these expenses will magnify and become a massive load for the company and impede its business goals. This can be expensive and time-consuming and eat into valuable resources of core business activities.
