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Build vs Buy vs SaaS Decision Flow

Run the Decision-Tree MicroSim Fullscreen

About This MicroSim

Every IS organization faces a recurring question for every new capability: do we build it, buy a packaged product, or subscribe to a SaaS? This decision tree codifies the four questions that experienced practitioners ask:

  1. Is this capability a strategic differentiator?
  2. Will it change frequently?
  3. Does a mature SaaS cover 80%+ of requirements?
  4. Are there data sovereignty or regulatory constraints?

Each leaf shows a recommendation with a real-world example, the most common failure mode of choosing that path inappropriately, and the typical 5-year cost shape.

How to Use

  1. Click any node for examples and failure modes
  2. Walk a real capability down the tree (e.g., "tax calculation," "recommendation engine," "payroll")
  3. Reflect on whether your organization has chosen the path the tree predicts

Embedding This MicroSim

<iframe src="https://dmccreary.github.io/information-systems/sims/build-buy-saas-decision/main.html"
        height="722px" width="100%" scrolling="no"></iframe>

Lesson Plan

Learning Objectives

By the end of this activity, students will be able to:

  1. Apply the four-question heuristic to any capability
  2. Justify a Build, Buy, or SaaS recommendation with explicit reasoning
  3. Name the most common failure mode for each path
  4. Estimate the 5-year cost shape for each option

Suggested Activities

  1. Capability Sort (10 min) — Given 8 capabilities (CRM, payroll, recommendation engine, etc.), walk each one down the tree
  2. Find a Mistake (10 min) — In a case study, identify a capability where the company chose the wrong path, and explain why
  3. Defend a Choice (15 min) — Pick one capability your school or workplace runs. Defend or challenge the choice in two sentences

Assessment

  • Match real-world examples to their tree path
  • Explain why "80% fit" is the threshold for SaaS rather than 60% or 100%
  • Describe the failure mode of building a commodity capability

References

  • Hax, A. & Wilde, D. (2003). The Delta Project.
  • Carr, N. (2003). "IT Doesn't Matter," Harvard Business Review.