Build vs. Buy: How to Know Which is Best for You if You Need a CDP

If your company is interested in investing in a CDP, you probably have a lot of questions. There are so many CDPs in the market, and it seems like every one is a little bit different from the next. Trying to figure out which one is the best for your team and its needs can be a massive challenge as you survey the market.

Not only that, but the option of building out much of the CDP functionality is something some organizations will consider. This won’t be the best path for everyone. But, for Super Senders, the resources and organizational DNA might be there to tackle this task and give you all the features you need in one place.

Our recent webinar with Ansira SVP of Data Solutions Sukumar Muthya looked to take a deep dive into the CDP market to help you better understand the pros and cons of build vs. buy when it comes to a CDP, so you can make an informed decision about whether or not a build route could work for you.

Where to start

Before choosing your path, you should consider a number of questions:

  • Why are you buying? You need to know how you’re going to use the CDP, and what you’ll get out of it
  • Do you know your customers’ channel preferences? This is going to matter. If you don’t know, figure out how to know.
  • Where is your data? If it’s not consolidated yet, doing that may be your first step.
  • Are you open to a best-of-breed solution? If you have specific needs, it might be a good direction to go.

And, on a foundational level, there are five fundamental considerations for build vs. buy:

  • Control: Whether you want control on your data, data model, flexibility in terms of data modeling, or backend access to do troubleshooting.
  • Cost: Even if you go the buy route, there’s still a build cost. There is going to be some amount of build, even if it’s just bug fixes. There’s no out-of-the-box implementation.
  • Maintenance/Integrations: You need to make sure that you know if you have a need to integrate with your ERP, your logistics system, your call center system, wherever you may need to have a seamless integration that you’ll need to keep up with
  • Opportunity cost: Where do you fall? What area are you in your organization? What might building take time away from?
  • Time to market: How fast do you want the functionality to be live?

Looking at all that, when does it make sense to build out most of your own CDP functionality? A lot has to do with the type of organization you’re in, and the culture around development.

“Good build candidates have teams of people that are actually building solutions for you,” Muthya said. “Every single business unit goes to the I.T. organization, ‘Hey, I want to have this solution. I want to have this data.’ So, if your organization’s culture and everything is around that sort of communication and structure, then those are the types of organizations that will go for it. And then they have stringent monitoring governance, data, storage, auditing type of requirements, depending on the industry that they fall.”

How to build your reference architecture

Looking at an organization that already has a database, their marketers are almost inevitably struggling to access the data. And they’ll probably get confused that, in order to get access to the data, they need to embark on a CDP route, whereas they’re probably looking for a higher speed of access to the data coming from their own I.T. organization.

So they’ll really have to dig into their situation and figure out what exactly they’re looking for. They want this to be a truly use case-driven approach to drive their business goals, and they’re an enterprise organization with tons of customers that are coming in. They know they need to send their customers highly personalized messages, and they need to increase the conversion rate. So, if those are the key business values, they need to take a hard look at the use cases. Do they need to augment the data and go that route? There’s a complete exercise they have to go through and which can’t be answered in a short blog post.

“If you’re a digitally native company, and you’re just starting on things … on your business model, or if you’re building a new product or learning a new product, and you want to consolidate all the data in one place, there are lots of CDP tools out there that will help you,” Muthya said. “But if you’re an organization with everything invested in a large database in-house, then it’s really just about filling in the gaps.”

But how do I ultimately know what to do?

The “build vs. buy” question isn’t an easy one, but it’s an important one to get right. The biggest step you can take to know the best route for you is to take a hard look at your organization’s needs and make an informed determination about what you really need out of a CDP, then make your next decisions accordingly.

“Build your use cases, just go build what your business goals are and then go find the data,” Muthya said. “So you will have that data available. Then that will determine your use case. That’s number one. And see if you’re CDP ready. That means too look at it organizationally from a compliance standpoint, from a governance standpoint, from data availability standpoint and then implementation and the resource standpoint. How ready are you from a CDP readiness standpoint? Do you really need a CDP? So think of that as an important step, as opposed to saying, ‘Hey, this is a cool tool. So I want to buy the tool.’

“And then invariably, what we have seen is people buy a tool and then they force fixed certain functionality within the tool that was not meant for it. And then they complain to the vendor about it, saying this tool doesn’t work. Which is a mistake. I think you just have to go through what exactly you want and which tool really meets that. And then if you go over there, everybody will end up happy.”

To learn more about the “Build vs. Buy” question, including much more on building out a reference architecture and the CDP landscape as a whole, watch the full webinar on demand any time you like.