Nearly 15 years ago, an article in InfoWorld called the “buy versus build” conundrum “the oldest question in IT” and one of “Shakespearean proportions.” Today, the debate continues with a twist.

Once, only larger institutions could afford to consider the question. They typically have first-class internal development teams and the financial resources to both create their own products and maintain them over time. Today, the option is open to smaller lenders as well. Innovations in hardware, software, and agile processes have allowed an evolution. Long-held arguments may no longer hold water. New elements can be considered, especially around what build options look like.

So, how do you decide?

Do you continue using in-house or contract developers to create software that might match your business needs, or should you pursue a more modern way to rapidly build the systems you need?

Two build approaches

Build arguments typically focus on the expectation that your internal teams can create something better for less, even if it means starting with the first lines of code. But the true cost and effort to build is more complicated: The solution must be hosted. It requires ongoing investment to keep it current in the technology stack. It requires support in terms of features, compliance, third-party integrations, and so on. Measuring all elements and not just the most evident ones, the initial total cost of ownership assumptions favoring a build may not be nearly as attractive as they first appeared.

Your conversations should expand to cover two options:

1. Build from code, in which you assume full responsibility for hardware, infrastructure, software development, and ongoing management and maintenance of resources.

2. Build by configuration, based on a highly configurable, cloud-based originations solution on an easily integrated platform of lending services.

The new approach

When considering new software solutions, you should be asking:

• Which solutions should we subscribe to?
• Which integrations should we manage?
• What other products and projects can our teams take on?

Prebuilt integrations allow you to select and quickly incorporate the services that meet specific needs. And integrated analytics deliver real-time insight; give you out-of-the-box reports, custom reports, and configurable dashboards; and let you drill down into relevant details.

With this approach, your business can start not by writing the first line of code but by building from configurable solutions, creating a single platform as your foundation. That foundation brings the tools and the prebuilt integrations to accelerate your build; realize a lower total cost of ownership, greater value, and lower risk; and create a system that meets your unique lending needs.

Getting started

defi SOLUTIONS provides configurable loan origination systems, servicing, analytics and reporting, and a wide range of technology-enabled BPO services. If you’re struggling with the limitations of your current loan origination software, take the first step in building the lease or loan platform that meets your needs. Download a free copy of the “Yes, Build! Why Not?” whitepaper.

SCOTT HENDRIKS is director of product strategy for defi SOLUTIONS.