To Build or Buy

Building a custom solution versus buying a packaged solution is a question we deal with continually. Our bias is generally toward buying solutions where we can. In those cases, we are going to get the advantage of a vendor producing a solution for which the vendor can leverage their resources across a lot of different customers. If we built it ourselves, we would have to maintain the same kind of team that the vendor would have just to keep the application going. Where we think it is feasible, we are going to buy a solution and then modify it only where absolutely necessary. We particularly focus on buying packaged solutions for back office applications such as financials and human resources systems. These systems are critical to the operation of the company, but are not considered competitive differentiators.

Our approach will be different in places where we feel we have a strategic imperative. Some of our core customer-facing areas in particular, such as e-commerce, catalog order management, and retail point of sale, are where we are going to focus most of our in-house and custom development. These solutions are either fully custom or heavily modified packaged solutions. In the case of our e-commerce businesses, these are highly customized solutions because we feel it is important to offer exactly what our customers need, but also offer a differentiating experience with Staples that is really tapping into all that we have to offer within the company.

There is also another big question based on using internal resources for custom development versus using a third party. We base this decision on a number of factors. Do we have the appropriate skill sets internally? If we do, are those resources available, or are they committed to another project? Are there other benefits we can get from using a third party? When we first built a number of our e-commerce businesses, we did much of the work with third parties, but always kept our team plugged into the development process so we could pick up the application once it was completed. At the same time, we were building our own internal team to do follow-on releases and development of those products. In general, we are only going to bring in third parties for custom development when we have a need for the particular skill or when we have a project that we don't have the resources internally to do ourselves. In those cases, we either outsource the project entirely, or we put together a joint team of our resources and a third party resource to develop something.