1 Build versus Buy Alternative Strategies for Providing Workers Comp Solutions Panel Discussion AASCIF IT Committee Seminar Nashville, TN September 23 & 24, 2010

2 Panelists Glenn Audiffred, Louisiana (Buy) Mike Foerst, Missouri (Buy) John Koenig, Kentucky (Build) Brian Stephens, Maryland (Build)

3 The Bulls Say… Never build. Always buy. Buy a mature application that has been on the market for at least three years and adapt it to your purpose, running it on equipment you already own Never buy a 1.0 or even 2.0 version if at all possible The name of the vendor doesn’t matter as long as its been on the market 3 years and has significant market share If off-the-shelf applications still won’t work, consider outsourcing, especially Web-based applications suites

4 The Bulls Rationale Only a small percentage of projects succeed The larger the project, the smaller the chance of success

5 Configure; Don’t Modify Avoid massive customizations to the level of rewriting third-party apps until they are essentially home grown (1) Can end up with maintenance costs equal to or greater than those incurred by in-house developed apps (1) When does a buy approach morph into a hybrid build approach? (1) To build or to buy IT applications; Polly S. Traylor

6 Golden Rule?? “Buy when you need to automate commodity business processes” (1) “Build when you’re dealing with the core processes that differentiate your company” (1) (1) To build or to buy IT applications; Polly S. Traylor

7 Comparative Model Buy vs. Build Software Applications: The Eternal Dilemma; Bruce F. Webster