Business and IT
Business is an organization that conducts a business activity and offers products on the market. IT is the digital infrastructure that should support this business activity and create new product opportunities. Business has an interest in ensuring that IT is aligned with business requirements and improves its own competitive position. After all, digital data makes many things possible that are difficult or impossible to achieve in the analog world. As simple as this sounds, it is just as complex in reality. For data to be exchanged between different systems and programs, standards are needed.
IT products to implement business requirements
To implement this, products are needed that offer the required functionality. They should be fit for purpose and cost-effective. To do this, they must support the most common standards. Products can be developed in-house, purchased or obtained as a service.
What is a product?
A product is a total package consisting of functionality, customer benefit, customer experience and cost. Four cornerstones define a product: functionality, customer benefit, customer experience and cost. They also largely determine the potential customer base. In the case of in-house development, the customer is the company itself. What is decisive for the customer is not only the functionality when the development is completed or the purchase is made, but the functionality over the planned useful life. The customer benefit is objectively determined by the totality of the performance characteristics of the core product and the associated contribution to the customer's problem solution. The performance characteristics include not only functionality but also implementation. Functionality alone is no guarantee for a customer-oriented and competitive customer experience. This relates to the customer's subjective experience from product evaluation - through purchase and commissioning - to the end of product use. In addition to user-friendliness and integrability, this also requires customer service that is efficient for the customer. A customer service that supports the customer in case of product-specific problems and ensures that the customer can use the product as planned during its service life. Product development does not end with the availability of the product, but is an ongoing process.
Product: Build or buy?
Custom and in-house development only makes sense for those parts that either serve as an interaction interface with third parties or are not available on the market in the required form or for the desired price. Interaction interfaces with third parties are needed on one hand for one's own web presence and on the other hand for one's own offers that availbe over a digital channel. Custom development requires the support of standards towards the outside, while towards the inside, i.e. within the product, there is a lot of design freedom to efficiently implement the desired functionality. Custom development only makes sense if a clear added value is created in comparison to commercially available solutions, thus improving one's own competitive position. Custom development can create a substantial competitive advantage that would otherwise not be possible. Both, custom developments and commercially available products create dependencies.
In-house developments
In the case of custom developments, internal know-how covering product architecture and product development is a must. This is a company dependency on its own organization and its own resources. Even if an custom development is largely completed, a sufficiently large team must continue to exist for the in-house development so that the know-how can be maintained. An operationally usable product must also be maintained and further developed. Otherwise, due to the platforms, frameworks and libraries used, the technical status quickly becomes obsolete, usability in conjunction with external resources is no longer guaranteed, and the competitive advantage is constantly diminishing. In addition, due to a lack of activity, know-how is lost, which has a negative impact on the value of in-house development and the maintenance of the associated functionality. Only people with limited understanding fail to grasp that software development based on available platforms, frameworks and libraries is never complete. Because these platforms, frameworks and libraries evolve or become obsolete. In the process, among other things, functional and security-relevant vulnerabilities are also eliminated, which in turn have a direct impact on in-house development. These are dependencies that must be taken into account for every in-house development, especially of complex systems.
Commercial products
In the case of commercially available products, the vendor of the product is subject to all of the foregoing for proprietary developments, plus the customer is subject to the vendor's respective implementation, business policy, and product policy. There is no guarantee that a vendor will continue to develop or offer its products in the same form in the future. There are no guarantees that the vendor will fix functional or security vulnerabilities and malfunctions. Nothing prevents the vendor from making its products or certain functionalities dependent on the use of its cloud offerings. That's what's happening in the market right now, and it's having a direct impact on the IT structure at the application and data level, on the organization and on the processes. On top of that, the pricing power is with the vendor and this is significantly increased by forcing them to use their cloud offerings. The effort for customers to change vendors is constantly growing, and with it the dependency.