Build vs Buy: 5 essentials every insurance CIO should consider

To Build 

When building a software product in-house, the upside is full control over features, roadmap, integrations, updates and customisations. You own it, so you get to decide everything. Which also comes with its side-effects, for instance the time spent making every single decision from the smallest scale to the bigger picture, to the general direction and making sure all stakeholders are satisfied. With the power of decision making, comes the full responsibility for the past, present and future of the project. 

To Buy 

When you buy an off-the-shelf product, you have a less customisable product. But “out-of-the-box” doesn’t equal no personalisation. It's important to note that "out-of-the-box" doesn't mean the insurer can't personalise the product to align with its brand, culture, and customer demands. Many SaaS products offer a certain degree of personalisation, but ultimately, the vendor controls the product, so you are dependent on them for updates, feature additions and changes. 

To Build 

Building your own solution allows for tailored innovation. You can develop and implement features specifically designed to meet your business needs and build your system according to your strategic goals. However, this approach requires significant investment in R&D and staying on top of technology trends and best practices. This intensive resource allocation can be demanding, both in terms of financial investment and the need for a skilled team to drive innovation. 

To Buy 

When considering innovation and future-proofing, a SaaS solution offers the advantage of continuous innovation. Buying a SaaS product brings ongoing improvements and regular feature rollouts, ensuring that your system remains up to date with the latest technological advancements. However, this advantage also comes with dependency on the vendor’s roadmap. Your organisation’s future enhancements and capabilities are tied to the vendor’s development schedule and priorities, which may not always align with your timing. 

To Build 

The development cycle of building an in-house solution is longer, delaying the time to market. That means when the software is ready to run, the needs of the company and project specifications might have changed and the solution becomes out-dated sooner than later, causing delays and negatively impacting the return on investment. Playing catch-up with an initiative that is as resource intensive as it can get usually doesn’t look good on a balance sheet. 

To Buy 

When you buy software, the key components are already developed, so the deployment of a project with a SaaS solution is much quicker. In fact, time-to-market is usually a success metric of SaaS companies, so look out for it and inquire with vendors about their stats. The feature cycle of SaaS companies is shorter, meaning they are frequently launching new features and enhancing their products to make their offering more attractive to new and existing customers. 

To Build 

When it comes to integrating new systems with existing ones, building your own solution provides the advantage of seamless integration. However, this approach brings significant complexity. Seamless integration requires meticulous planning and execution to address all potential integration points and ensure the new system works flawlessly with existing platforms. This complexity can extend development timelines and necessitate specialised expertise. 

To Buy 

On the other hand, purchasing a SaaS solution often comes with the benefit of pre-built integrations. These are designed to work with popular systems, facilitating quicker and easier deployment. While this can accelerate time-to-market and reduce initial setup efforts, it also comes with limitations. The pre-built integrations may not cover all the specific needs or nuances of your existing systems. Additionally, if custom integrations are necessary to meet specific business requirements, they often can be implemented, albeit sometimes a challenging process. 

To Build 

By building your own solution, you can design and implement security measures tailored to your company. This allows for highly personalised security and compliance standards that can adapt to the specific threat landscape your organisation faces. However, maintaining and updating compliance standards involves continuous monitoring, regular audits, and adapting to evolving regulatory requirements, which can be resource-intensive and complex. 

To Buy 

Purchasing a SaaS solution means relying on the vendor’s security measures. Most reputable vendors invest significantly in robust security protocols and compliance frameworks, often exceeding the capabilities of individual organisations. However, security in a SaaS environment is a shared responsibility. While the vendor secures the infrastructure and application, the customer must ensure proper usage, access controls, and compliance with their internal policies. 

As with many of the questions being posed to CIOs today, there are no easy answers. While building a custom solution provides unparalleled control and tailored features, the significant resource investment and complexity may outweigh the benefits for many organisations.

For insurers navigating the digital landscape, purchasing a SaaS solution may be a more favourable option. It offers lower upfront costs, faster time-to-market, built-in scalability, and continuous innovation—all critical factors for staying competitive and delivering exceptional customer experiences. 

Ultimately, the decision should align with your strategic goals, resource capabilities, and long-term vision for innovation and growth. If you’re still on the fence, feel free to reach out to us and we would be happy to help simplify the process and help you meet your goals.