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Build vs Buy: Where Utilities Should Dedicate Resources for Enterprise Integrations

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Frederik ten Sythoff's picture
VP Marketing Communications Greenbird Integration Technology

Utilities worldwide are starting to recognise the need to become a platformed utility that can innovate rapidly and offer new services quickly. At Greenbird, I can fulfil my ambition to help...

  • Member since 2019
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  • Oct 1, 2020

This item is part of the Advances in Utility Digitalization - Fall 2020 SPECIAL ISSUE, click here for more

In recent years, the utility sector has experienced an evolution as new technologies make way for digital transformation; with the goal of fostering innovation, improving customer engagement, and streamlining processes. This has increased the demand for utilities to add new integrations into their service offerings. Utilities are faced with building and maintaining integrations using a combination of in-house developed and best-of-breed products or to invest in an out-of-the-box iPaaS solution.

While developing an in-house integration may seem like the most direct way to solve this specific business challenge, it can result in lengthy turnaround times, high legacy costs, and a significant amount of specialized resources. Alternately, many utilities may struggle to find an off-the-shelf iPaaS solution that adequately meets their needs.

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How can a utility determine which solution is best for their project needs and will lead to the highest ROI? This can be addressed by looking at the available tools, resources, project deadlines, and budgets to make the best decision for your business.

Legacy Systems & Disparate Tools

Utilities are often locked into legacy systems that create obstacles when adding new integrations to their ecosystem. Many utilities believe that building onto their existing legacy systems is the easiest solution, but underestimate the complexity involved to effectively accomplish this task. In fact, it is so common that enterprises allocate up to 80% of their annual IT budgets maintaining their custom software and legacy systems. Previous research put that number closer to 50-70%, so it’s clear the problem exists and continues to grow.

Utilities looking to add new integration offerings have to consider the available time and resources they have to dedicate to the project. Some of the biggest considerations when building an integration on top of a legacy system is sourcing talent that understands the coding language within your legacy system and allowing ample development time (including maintaining the integration beyond the initial build).

In fact, in a survey of 1,000 CXOs and senior level respondents conducted in 2019, 41% identified legacy systems as their biggest barrier to digital business transformation, closely followed by insufficient budget (30%).

The numbers make it clear that legacy systems can be more of a hindrance than an innovation tool for utility companies. Maintaining legacy IT environments often means developers are maintaining mundane tasks and complex backends instead of focusing their time and expertise to building innovative solutions and driving digital transformation.

On the inverse, sourcing an off-the-shelf iPaaS integration system can reduce legacy maintenance and time digging through hand-written code. Commercially available systems can integrate into your existing ecosystem, resulting in fewer internal resources, quicker time-to-market, and reduced costs.

This can also make way for building an integration system and more time to consider the business logic to ensure the project aligns with the utility’s goals. The biggest takeaway is for your developers who can reinvest their time maintaining monotonous code to focus on new ideas and innovation.

It is important to remember, however, that not all iPaaS solutions are created equal. Utilities should partner with organizations that are domain-specific iPaaS vendors who understand the ins and outs of the energy industry.

Stakeholder Collaboration

Building an integration system typically involves leadership setting a business goal for the project and IT fulfilling that need to the best of their abilities. Due to the inefficiency involved with building an integration from scratch, utilities can find that the final outcome doesn’t fit the initial requirements outlined by leadership.

The average custom built software takes between 4-9 months from design to deployment. Moreover, 75% of business and IT executives stated that their custom software builds were “always” or “usually” doomed from the start. Why? Building an integration can take a developer most of the year. Therefore, it’s common for the end product to differ from what the project initially asked for 9 months (or more) prior.

Investing in a next generation iPaaS solution is efficient and allows stakeholders with less technical backgrounds to be involved in the process. Removing the need for a hard-coded internal system empowers your workforce, as well as eliminates “shadow IT” to train those tasked with building or maintaining the integration.

This frees up specialized IT resources to focus on more complex projects. It also allows business stakeholders to be involved in the development process and ensures the project is meeting business objectives. The end result is a more collaborative experience that drives innovation, minimizes coding, and allows engineers to focus on projects that drive your competitive advantage.


Utilities have been slow in adopting digital transformation compared to other industries. In recent years, as new tools became available, there is a bigger focus on transformation to increase productivity, expand integrations and service offerings, and lower operational costs. This drive for innovation has resulted in increased pressure for faster time-to-market.

When utilities partner with a next-gen iPaaS vendor, the low-code configuration allows teams to import application interfaces and data to the platform in real time, and begin integrating immediately. When new software needs to be onboarded, utilities just need to add it to their integration hub.

The simplicity of an off-the-shelf integration solution can drastically eliminate obstacles that traditional coding creates for projects. Building a solution from scratch allows utilities to ensure the project is customized to their needs, but it also requires more technical resources and more time. McKinsey conducted a survey of more than 5,400 enterprise IT projects and found that 33% exceeded their intended deadline, and 66% were over budget. In fact, 17% of the projects are unsatisfactory and deemed a complete failure by the organizations.

With numbers like that, choosing the right avenue is critical when utilities dedicate enterprise resources to a new integration system. Utilities with the time and resources to dedicate to an in-house solution need to set appropriate time-to-market goals. Utilities looking to quickly roll out enterprise integrations will find that iPaaS solutions help them achieve their deadlines while reducing costs along the way.

Choosing the Right Approach for Your Business

Choosing the right solution for your enterprise integrations is critical for ongoing success and innovation. When identifying whether to create your own integration services (build) or invest in a commercially available domain specific iPaaS solution (buy), it’s important to consider what resources, time, and budget are allocated to the project. Consider a domain specific iPaaS solution which offers pre-built integrations and connectors, combined with high-performance API, that enable you to scale and add new enterprise integrations in days instead of months, or years. Utilities that align with a next-generation iPaaS solution will more quickly and effectively achieve their business goals and drive innovation.

The Future of Enterprise Architecture

How do you transition to a next-gen enterprise architecture that enables data-driven innovation and operational excellence? Whether you are planning or executing transformative initiatives across energy services, grid analytics, application modernization, or a 360 view of your utility, you need modern IT architectures that can simplify collaboration with market participants and accelerate time to market service innovation. But how to build an architecture for the future digital utility is still a puzzle to many. In a next article we will offer a reference architecture that will help piece together the enterprise architecture puzzle and provide actionable best practices from transformative industry-leaders and innovation frontrunners.




Paul McDonald's picture
Paul McDonald on Oct 7, 2020

80% of IT spend on maintenance! That's in range of what our data show, and wow that's high. I'm a big believer in enterprise SaaS as the answer to that problem. It's not just the automated full-stack techops--it's the most efficient software delivery model the world has ever seen.

But it does not solve the problem of integrations. Looking forward to your next piece on reference architectures.

Frederik ten Sythoff's picture
Thank Frederik for the Post!
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