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Maritime and shipping organizations are increasingly investing
in digital transformation in order to remain competitive in the
face of industry pressures, volatility and growing demands from
customers and service partners for real-time access to operational
data. While this trend has been picking up speed in recent years,
the pandemic has accelerated it further by underscoring the
industry's vulnerabilities, as it has struggled to adapt to
supply-chain disruption and remote working.
One of the first decisions maritime organizations face when
exploring their options in relation to digital transformation is
whether they should build or buy a solution. As little as a decade
ago, with few purpose-built solutions for workflow automation, data
management and related practices on the market, building a solution
in-house was an attractive option for many. However, as vendor
technologies have matured and industry priorities have shifted, the
benefits of buying a solution have multiplied.
Here are four key points that maritime and shipping industry
participants should consider when deciding whether to build or buy
the workflow automation or data management solution they need to
support their digital transformation strategy.
Risk management
For most organizations, building technology is outside their
core competence, which means there is an element of risk involved
in taking on the challenge of designing, building, and delivering a
stable and high-performing solution in-house. This risk also
applies to the organization's capacity to manage ongoing
monitoring, maintenance and upgrades to ensure the platform
continues to provide reliable, optimal support.
In-house builds are also vulnerable to key-person risk because
in many cases, one team member holds the operational knowledge and
is solely responsible for managing the solution. In these
situations, staff turnover can be devastating for the organization,
resulting in the inability to adapt and scale, or even impacting
critical business lines. By situating this function outside the
organization, a vendor solution protects legacy knowledge and
provides continuity.
Time-to-market
For many, the need for digital transformation is urgent and time
is a luxury in short supply. Vendor solutions offer a clear
advantage in this regard, as they are tried, tested, and ready to
implement.
Resource utilization
Reassigning employees or bringing in new talent to build and
manage technology draws resources and focus away from the
organization's core capabilities, and there is an opportunity cost
to be factored into the build or buy decision. When an
organization's human and financial resources are diverted to
support a complex and intensive technology initiative, it can
jeopardize the ability to support critical business areas or
explore new opportunities.
A specialist third-party solution can help your organization
protect resources in two ways. First, it eliminates the
considerable resource consumption associated with the build itself.
Second, if the vendor offers a managed service deployment model, it
enables the organization to offload responsibility for ongoing
maintenance, change management, support and upgrades. Not only does
this free up internal resources, but it also results in a lower
total cost of ownership (TCO), in both the short and long term,
when compared to an in-house solution.
Network effect
Historically, organizations in the maritime and shipping
industry have carefully guarded their industry knowledge and
experience, but this is changing rapidly as industry players
experience the benefits of forming communities to collaborate and
share knowledge to achieve efficiencies across the supply
chain.
Organizations that implement a vendor solution are benefiting
not only from the expertise and R&D of the vendor, but also
from the experience of users at other companies who provide their
feedback for the ongoing development of the product. As the
maritime industry continues to move towards greater openness,
standardization and collaboration, participants relying on siloed,
heavily-customized, in-house platforms are likely to find
themselves at a disadvantage compared to their peer group.
Conclusion
Answering the build vs. buy question requires an understanding
of how the maritime industry and the technology landscape have
changed. The continued maturation of vendor technology and managed
services, together with increased adoption rates across the
industry, have now clearly shifted the balance in favour of vendor
options for maritime organizations that want to reduce risk, take
advantage of more value-add opportunities, and optimize resource
and capital utilization.
Visit our
webpage to find out how we are helping industry participants
maximize the value of their data and embrace digital
transformation.
Posted 09 March 2021 by James Kwan, Director, Business Lead, EDM for Maritime, S&P Global Market Intelligence
