Something that vexes every finance and accounting organization is the challenge of managing your internal technology portfolio to meet the changing needs of your constantly changing company. Should you continue to patch that old system or buy something new? Should you use point solutions or broad-based platforms? How much is the right amount to invest and which direction has the highest ROI. Well, as it happens, the answer is, “it depends”. This event will focus on how to perform a build vs. buy analysis for finance and accounting automation projects covering these very issues, helping you form a coherent technology strategy, along with tactics for execution.

1. Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals
Navigating the Build vs. Buy Decision
for Your Finance Technology Needs

2. Today’s Speaker
2
Ø 20+ yrs in finance
Ø Expert in revenue recognition
and back office automation
Ø Chief Business Officer at
goTransverse
Ø Favorite Food: Doritos!
Mike Murphy, CPA

3. Today’s Take-a-ways
3
• Manual processes (the status quo) are the right answer
• Upside/downside of growing your own solution
• Upside/downside of going with a specialized vendor
• Best practices when performing a build vs. buy ROI
analysis for FinTech projects

4. Taking the lead in IT decisions
4
Accenture 2014 High Performance Finance Study, CFOs:
• 40% drive decisions actions impacting tech investment
• 45% play the top role in monitoring ROI
• 23% are in charge of identifying tech to retire/replace
• 2 of 5 anticipate increased investments in cloud and
SaaS by at least 26%, with 11% saying increase >50%
Source: CIO Insight coverage of Accenture 2014 High Performance Finance Study;
http://www.cioinsight.com/it-management/it-budgets/slideshows/cfos-taking-lead-role-in-it-decisions.html

5. The Choice Chart for FinTech
5
Do
Nothing
Manual
Processes
3rd
Party
Solu7on
Homegrown
On-premise or
hosted?
On-premise, SaaS
or hybrid?
More
Spreadsheets!

6. When Manual Processes Work
6
Ø Start-up/early stage company
Ø New go-to-market strategy
Ø No/few business processes
Ø Opportunity cost to manage
manually is less than the
benefit of automation
photo
by
Craig
Chew-­‐Moulding
on
flickr

7. Benefits of Manual Processes
7
Quickly
adjust
to
market
changes
Tes7ng
of
processes
Evolving
business
model
90
Day
Rule
• Leadership
• Acquisi7ons
• Mergers
• Greenfield
product
offers

8. When Manual Processes Fail
8
• Have repeatable processes filled by an ever-increasing
accounting or finance (or sales, marketing, etc.) team
• Can’t hire fast enough to satisfy demand
• Inability to forecast revenue and/or expenses
Don't put off until tomorrow what you can do today.
-Benjamin Franklin

9. When Homegrown Works
9
Ø Light automation suffices
Ø Nothing in the market
Ø Increases valuation
Ø Skillset and experience
available in IT / Engineering
photo
by
Nata
Luna
on
flickr

10. Benefits of Homegrown
10
Highly
customized
to
meet
your
specific
requirements
Control
over
the
budget,
7melines,
technology,
etc
Feature/func7onality
addi7ons
tailored
to
business
Poten7al
use
as
compe77ve
differen7ator

11. When Homegrown Fails
11
• Bubble Wrap Bob!
• Maintaining levels of
compliance, service, and
security
• Inability to shift resources to
other projects
Just
because
you
have
brilliant
engineers
doesn’t
mean
you
can
do
it
faster
or
cheaper.
photo
by
Andy
Smith
on
flickr

12. When 3rd Party Software Works
12
Ø It meets core business
requirements
Ø Time-to-market is critical
Ø Current and future functionality
useful in next 3-5 years
Ø Skillsets and experience in IT/
Engineering not available
Ø Not a competitive differentiator
photo
by
ScoC
Maxwell
on
flickr

13. Benefits of 3rd Party Software
13
Vendor
responsible
for
support,
defects,
product
updates
Vendor
incurs
costs
of
PCI,
HIPPA,
SSAE
16,
etc
compliance
and
security
of
solu7on
Vendor
responsible
for
up7me
Benefit
from
other
companies
using
the
system
Focus
internal
resources
on
products
you
sell
Time
to
value
can
be
much
faster

14. When 3rd Party Software Fails
14
• Product only meets 20-30% of your use cases
• Inability to modify functionality in any meaningful way
• Not compatible (or able to integrate) to other systems
• Fixes and enhancements on the vendor’s schedule
• Obsolesce or deprecation of versions or features
photo
by
Ed
Yourdon
on
flickr
Software/Technology may help
with business processes but it
can’t define it for you.
Garbage in = Garbage out!

15. Best Practices for Build vs. Buy
15
1. Validate need for technology – no tech just for tech sake
– Legit business need?
– Awed by product hype or success stories?
– Added business value?
2. Identify core business requirements
– MUST be supported by the solution
– Ensure all business owners are included
– Business first, technology last

16. Best Practices for Build vs. Buy
16
3. Identify architectural requirements
– Information security strategy
– System interfaces
– Existing corporate standards
4. Examine existing solutions
– Include solutions already in-house across all departments
– External solutions to extend in-house or net new
5. Evaluate in-house technical capabilities
– Do you have the right resources to support a custom solution?
– If not, willing to have OJT?

17. Build vs. Buy Considerations
17
Cost
Type
Build
Buy
–
OnPrem
Buy
–
SaaS/Cloud
Build
Out
Cost
of
FTE's
required
to
build
out
the
solu7on
Generally
SoZware
and
Hardware
costs
No
Upfront,
part
of
the
service
Implementa7on
Cost
to
implement*
Cost
to
implement*
Cost
to
implement*
*
Do
not
overlook
the
cost
for
business
users
to
support
implementa7on
and
ongoing
training
Administra7ve
Cost
of
service
post
produc7on.
Password
resets,
technical
support,
etc.
Cost
of
service
post
produc7on.
Password
resets,
technical
support,
etc.
Most
vendors
include
in
offerings,
but
beware
of
hidden
costs
Change
Management/
Upgrade/
Maintenance
Cost
of
FTE's
to
maintain
the
solu7on
Generally
a
%
of
total
license
fees
paid
Most
vendors
include
in
offerings,
but
beware
of
hidden
costs
Compliance
Maintain
compliance
and
adhere
to
audit
requirements
for
PCI,
SSAE16,
HIPAA,
etc.
if
applicable.
Maintain
compliance
and
adhere
to
audit
requirements
for
PCI,
SSAE16,
HIPAA,
etc.
if
applicable.
Vendors
maintain
compliance.
Ask
to
see
cer7fica7ons.

18. Cumulative Spend – Build vs Buy
18
-­‐
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
Year
1
Year
2
Year
3
Year
4
Year
5
Buy
Build

19. In Summary
19
• Build vs. Buy decisions are scenario dependent, even
within companies.
• Technology cannot fix poor business processes –
beware of shiny red ball syndrome!
• Remember to factor in person hours and opportunity cost
of resources no matter the choice.
• If you can’t make money on the IP, seriously consider
vendor software. Spend valuable tech resources on your
core competencies.

20. Additional Reading
20
• http://news.dice.com/2013/07/11/build-versus-buy-the-7-
most-important-questions-to-ask/
• http://www.3csoftware.com/to-build-or-to-buy-comparing-
custom-and-off-the-shelf-software-applications/
• http://www.lexicon-systems.com/pubs/white-papers/
Lexicon_BuildVsBuyTenLessons.pdf
• http://www.cincom.com/pdf/CM071218-1.pdf

21. Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals
Thank you!