Why Bespoke Development is a Cost-Effective Choice for Early Adopters
At its earliest stages, IT innovations are always custom, bespoke solutions. The Defense Advanced Research Projects Agency (DARPA) is the premiere innovator for the U.S. Department of Defense (DoD), and DMC is proud to be a trusted innovation partner supporting their efforts. As our projects at DARPA mature, our innovations become accessible to “Early Adopters” and the “Early Majority”, giving these organizations strategic advantages ahead of the rest of the market when properly implemented. In this blog, we will highlight the relationship between the development and adoption of new technologies (Diffusion of Innovation) with the risks and costs of bringing those technologies in house early (Bespoke Development), and why waiting for commercial-out-of-the-box (COTB) offerings can actually be more expensive.
Following last year’s steep decline in IT investment, organizations are throwing themselves back into the game during 2021. Today, Gartner projects $3.9 trillion of IT growth by the end of this year, while other studies show that businesses are flocking to adopt emerging technologies like AI, ML, cloud computing, and others.
Along the way, many will debate the merits of custom-tailored, or bespoke, development vs. COTB solutions. To some, it will seem like an easy call: conventional wisdom suggests that COTB is the most cost-effective way to adopt new innovations, while bespoke development is thought to be prohibitively expensive – reserved for the largest and most stable organizations.
But there are good reasons to challenge this assumption, especially for technologies in the early adoption phase. When the optimal time for investing in a new technology rolls around, existing COTB solutions can be uncommon and underdeveloped. When all factors are considered, bespoke development is often the best choice, even for organizations with a smaller budget.
The Right Time to Adopt
Based on anecdotal evidence, few will doubt that their industry is split among risk-takers, leaders who resist change, and a broad spectrum in between them. During the 1940s, scientists Bryce Ryan and Neal C. Gross developed the Diffusion Model of Innovation, which outlines five categories of technology adopters that remain relevant today:
Innovators are quick to try new things. They shoulder the majority of risk by adopting technologies before anyone else.
Early adopters arrive quickly, but only after they’ve seen some proof of business benefits.
The early majority waits until the success of early adopters shows that a new technology is worth their time.
The late majority react to peer pressure and emerging trends; they adopt innovations only when most of the uncertainty has dissipated.
Laggards are stubborn holdouts who prefer the “old way” of doing things and wait until they have practically no choice but to adopt the new way.
In general, businesses that are early in the diffusion process (innovators and early adopters) enjoy a higher competitive advantage. However, they pay for it with low maturity and higher risk. Businesses that are late in the process (late majority and laggards) enjoy better stability but lose out on the competitive advantage.
In theory, the best time to adopt new technology is the exact center: during the early majority stage, an idea has been around just long enough to reach maturity. However, it is young enough to pay dividends through further growth.
Why Bespoke Solutions Are Better
We’ve established that the early majority is the best place to be in the process of technology diffusion – and generally, that means three things:
Early adopters are generating publicity after sustained success.
Market growth is rapidly accelerating.
Future projections are more than double the current market size.
But while this position is advantageous, it also comes with a unique set of challenges: at this stage, few COTB solutions exist, which prevents mass adoption. The ones that do exist are either overly specialized or overly broad: in both cases, they are usually underdeveloped.
At this stage, bespoke development should be strongly preferred for a number of reasons:
More cost-effective – since COTB solutions are designed for a wide customer base, they require you to pay for features you don’t need along with expensive licensing fees, upgrades, and customizations. Bespoke solutions are streamlined to your needs from the get-go, and the option for open-source development further cuts down on cost.
Faster implementation – early COTB solutions require a significant amount of customization with an extended time period for implementation and adjustment. After delivery, bespoke solutions “just work”; infrastructure requirements, cybersecurity, and other special considerations are built into the design.
Lower risk: bespoke development guarantees a final product that is not tied to a product vendor. Retaining control negates the risk of obsolescence, business closure, end of support, and updates that break important business functionality.
Competitive value: in the early majority phase, bespoke solutions always provide superior value by giving your organization access to cutting-edge features that may not be bundled with COTB products for months or even years.
Example: Saving Millions of Dollars with Open-Source Software
The financial and strategic benefits of bespoke software development flow from its superior versatility. In particular, custom-tailored solutions allow open-source alternatives to expensive commercial software frameworks that drastically inflate the overall cost of a solution without providing better functionality.
In one case, Data Machines Corp. (DMC) developed a biometrics solution for a large government agency that required handheld, local, and cloud-based resources. In only five weeks – comparable to implementation for a COTB solution – DMC delivered these resources from scratch using open-source options the client owns outright. Our solution completely avoids commercial licensing costs, saving the client millions of dollars per year in licensing fees through the use of open-source software.
Emerging Technologies
It is an exciting time for IT, not only because of increased investment, but also because next-generation technologies that will shape the future of business have crossed from the early adopter to early majority stages of diffusion. For instance,
AI and ML – by 2025, the AI market is set to grow more than 300%.
Internet of Things (IoT) – today, less than 40% of companies have deployed IoT solutions, while another 22% will deploy within two years.
Biometrics – the biometrics industry is poised for massive growth through 2026 with a compound annual growth rate (CAGR) of 35.5%.
Hybrid, Private and Multi-Cloud – every form of the cloud industry is set to grow through 2024 with constant improvements in cost and efficiency.
These are just a few areas of technological development which overlap with DMC’s technological capabilities. For more, see our capabilities overview. All told, it’s the perfect time for businesses in both the public and private sector to adopt emerging technologies, and that means it is also the perfect time to ditch out-of-the-box solutions for custom-tailored development.
