A perspective on owning your IT vs renting your IT

Introduction

As IT reckons a significant place in the budget heads of today's orgs, both as a key cap-ex and op-ex component, it is important to ask the question -

Are those investments in IT helping you move in the direction of owning the IT vs renting the IT?.

Majority of today's businesses still sees IT as a non-core area and rely on off-the-shelf products and SaaS service providers to service their digitisation requirements. This is akin to renting the IT needs of your business and this is one of the most common way IT is consumed by businesses for a very long time and the case is the same when a traditional businesses contemplate on starting out on their digitisation journey for the first time as well. To the traditional business mind - investment for a machinery or a new facility setup is a direct capital investment that directly impacts top-line revenue and profitability. But IT is considered to be only an enabler that is better handled by a 3rd party vendor.

But a new class of companies and start-ups are emerging - with an IT first mindset. In such companies - they have a CTO / Software Developer as part of the core founding team. They have a developer culture from the start that makes key contributions towards laying a solid foundation for shaping the future IT landscape of the business. Instinctively they are in it to own their IT from the start vs renting out their IT. These companies see IT to directly influence their top-line growth as opposed to seeing IT as bottom-line cost saver.

Benefits of owning your IT vs Renting your IT

1. Flexibility in shaping the core business objects from scratch
2. Data and software is yours
3. Build IT for your business vs adapting your business to something that pre-exists out there.
4. Ensure high degree of privacy & security
5. Not restricted to a single vendor for IT - the flexibility of adopting to and putting in place the best of what is out there in the market.
6. Most suitable to make your business 'future ready' and to get plugged-into the digital marketplaces by which you can take your business global at a fast pace.
7. 10x ROI and cost saving in the long run
8. In the end IT remains a valuable asset the organisation own - that directly adds to the value of the company.

Feasibility of owning your IT - and how open source enables the very thing.

It is near to impossible to build an SAP or Oracle software completely in-house that can meet all operational IT requirements for the business. It is also a well-known fact that till-date the internet and backend server services are predominantly run using open source softwares, and the customer facing applications and business softwares are developed by ISVs (independent software vendors), SAPs and Oracles, apart from few that existed for a long time like WordPress, Moodle, Mantis etc from the OSS world. The landscape is changing now since last several years with the advancements in the web and mobile technologies like React, Angular, Vue, node servers etc - there has been a significant catch-up of Open-Source projects in the application layer category of softwares that are challenging the big proprietary softwares in the same category. A lot of the startups that turned unicorns has benefitted a ton from some of these open source technologies and solutions as the underpinnings of their growth and scale.

Here is an excellent article that gives a list of leading open-source challengers to proprietary softwares. This article also covers good insights into why open source model is so successful and can be relied for running the business critical applications for any business.

Even if IT-first culture is not in the DNA of your business - how it is possible still to move in the direction of owning your IT

Some worthwhile “gene editing” efforts towards this end are:

1. Invest in hiring a hands-on software developer CTO (who has extensive prior experience in IT) as part of your core team member - and give the person a free reign in shaping the organisational IT landscape - over a period of one or two years the tech seed starts taking roots and begins to bear fruit for the business. And in no time IT becomes an intrinsic part of your org.
2. Consult with a vendor that understands open-source to help you setup your IT organisation. Choosing a vendor is key here - since a lot of how your organisations evolves with IT depends on what the vendor is bringing to the table. Some key criteria for choosing an open-source IT consulting vendor are these:

• Having a good track record with integrity, trust and follows good security and privacy practices.
• Future proofing the tech landscape by choosing wisely the tech mix for your organisation.
• One who is transparent and does not vendor lock you.
• One who brings both consulting and implementation to the table.
• Put in place a reasonably strong NDA and a term contract that covers all aspects of privacy, security, IP and business continuity.
• Have good governance protocols and OKRs set for the vendor.

These aspects will help you cover well in working with a vendor.

In all sense - with the availability and maturity of IT infrastructures and Open-Source projects - NOW is the best time to start moving towards owning your company's IT.

A quick intro about us: We are?Tacten LLP— a Bangalore-India based software company that offers full line of services around?ERPNext?and?Frappe. We are a team of software developers and domain experts with an obsessive focus on helping our customers succeed with ERPNext and Frappe. Our primary area of expertise are in the Manufacturing and Healthcare domain. We have the extensive experience of implementing ERPNext for several domestic and international clients under our belt.