STD-GOV-128: Build vs Buy Decision Framework¶

Field	Value
Standard	STD-GOV-128
Title	Build vs Buy Decision Framework
Status	Draft
Owner	CDO
Created	2026-04-03
Review	Annually

Purpose¶

Provide a structured decision framework for determining whether Simpaisa should build a capability in-house, buy a commercial product or adopt a SaaS solution. Incorrect build-vs-buy decisions are among the most expensive mistakes a technology organisation can make — building commodity capabilities wastes engineering time, while buying strategic differentiators surrenders competitive advantage.

Scope¶

All new technology capabilities and significant capability extensions. Applies when: a new product feature is proposed, an existing vendor is being reconsidered, a team proposes building what a vendor already provides, or a commercial product is being considered for replacement of in-house code.

Decision Matrix¶

The primary decision driver is whether the capability is a strategic differentiator or a commodity:

Capability Type	Default Decision	Rationale
Strategic differentiator	Build	Core IP, competitive advantage, must control roadmap
Commodity capability	Buy / SaaS	Faster to deploy, vendor maintains, not a differentiator
Regulatory requirement	Build (if vendor cannot comply)	Must guarantee compliance, data residency, audit trail

Strategic Differentiators (Build)¶

Capabilities that directly contribute to Simpaisa's competitive advantage:

Payment routing and orchestration algorithms
Fraud scoring and risk models
Channel adapter framework (PSP/bank integrations)
Transaction lifecycle management
Multi-market compliance engine
Merchant onboarding workflow

Commodity Capabilities (Buy / SaaS)¶

Capabilities where Simpaisa gains no competitive advantage from building:

Email delivery (transactional and marketing)
Error tracking and APM
CI/CD pipeline infrastructure
Office productivity tools
Design and prototyping tools
Status page hosting

Regulatory Grey Zone¶

When a vendor claims compliance but Simpaisa cannot independently verify:

Request vendor's compliance certifications and audit reports.
Map vendor capabilities against specific regulatory requirements (per market).
If gaps exist that the vendor cannot contractually commit to closing, build in-house.
Document the decision and regulatory rationale in an ADR.

Total Cost of Ownership Analysis¶

Every build-vs-buy decision requires a 3-year TCO analysis covering:

Build Costs¶

Cost Category	Calculation Basis
Development	Engineer-months × fully loaded cost
Testing & QA	30% of development cost (standard multiplier)
Infrastructure	Compute, storage, networking for 3 years
Maintenance	20% of development cost per year ongoing
Training	Team onboarding and knowledge transfer
Opportunity cost	What the team would otherwise build

Buy Costs¶

Cost Category	Calculation Basis
Licence / subscription	Annual cost × 3 years, including projected growth
Integration	Engineer-months to integrate with Simpaisa's stack
Customisation	Any bespoke configuration or development
Training	Team onboarding to the vendor product
Migration (exit)	Estimated cost to migrate away if vendor fails
Vendor management	Ongoing relationship, contract, security reviews

Exit Cost Analysis¶

Mandatory for all Buy decisions:

Data portability — Can Simpaisa extract all data in a usable format?
Contract lock-in — What is the minimum commitment and termination notice?
Alternative vendors — Are there viable alternatives if this vendor fails?
Migration effort — Estimated engineer-months to switch to an alternative.
Business continuity — What happens to Simpaisa's operations during migration?

Decision Process¶

Proposal — Team submits build-vs-buy analysis via Beads issue with tag build-buy.
TCO analysis — Complete 3-year TCO for both options using the template above.
Exit cost analysis — Document exit costs for Buy option.
Scoring — Apply decision matrix criteria. Score each option.
Review — Present at ARB meeting for capabilities with annual cost > $10,000 or strategic impact.
Decision — ARB approves. Decision recorded as ADR.
Revisit — All Buy decisions revisited at 12-month mark and contract renewal.

Decision Documentation¶

Every build-vs-buy decision must be recorded as an ADR containing:

Problem statement and capability description
Decision matrix classification (strategic / commodity / regulatory)
3-year TCO comparison
Exit cost analysis (for Buy)
Risk assessment
Final decision with rationale
Review date (12 months from decision)

Historical Decisions (Examples)¶

Capability	Decision	Rationale	ADR
Payment routing	Build	Core differentiator, proprietary algorithms	—
API gateway	Buy	KrakenD — commodity, well-maintained OSS	ADR-API-001
Fraud scoring	Build	Proprietary models, market-specific rules	—
CI/CD	Buy	Bitbucket Pipelines — commodity infrastructure	—
Message broker	Buy	NSQ — commodity, proven at scale	—
Observability	Buy	Grafana stack — commodity, industry standard	—

Actions¶

#	Action	Owner	Deadline
1	Audit existing vendor contracts for exit clauses	Platform Lead	2026-Q2
2	Create TCO analysis spreadsheet template	Platform Lead	2026-Q2
3	Retrospectively document major build-vs-buy decisions as ADRs	Platform Lead	2026-Q3
4	Establish annual build-vs-buy review cadence	CDO	2026-Q3

References¶

STD-GOV-127-VENDOR-EVALUATION-FRAMEWORK.md
STD-GOV-124-ARCHITECTURE-REVIEW-BOARD-CHARTER.md
STD-GOV-125-TECHNICAL-DEBT-MANAGEMENT.md