Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 3, Issue 10;   March 12, 2003: Some Costs of COTS

Some Costs of COTS

by

As a way of managing risk, we sometimes steer our organizations towards commercial off-the-shelf (COTS) components, methodologies, designs, and processes. But to gain a competitive edge, we need creative differentiation.

By the time Jane arrived, Dave and Judith had already been over the question several times. A little out of breath, Jane sat down, sipped some of her famously strong coffee from the mug she always carried, and said, "So, what do you think?"

Judith began, "It comes down to Quasar or Elise. Quasar has a long list of big clients. Clearly they can do the work — they've done it before. On the other hand, Elise and her team have the know-how, and some clever ideas. And from their work on Marigold they know the business and everyone involved."

Commercial off-the-shelf (COTS)
solutions are more likely to work,
but custom solutions are
more likely to give you the edge
Jane sipped. "Tough choice."

Dave wondered if Jane ever slept. "Elise's proposal intrigues me," he said. "It could be the key to same-day approval. I just don't know if they can do it. Quasar has done it."

"Not same-day approval, they haven't," Judith said. "They've done big systems successfully, I'm convinced. But we need same-day approval."

Jane, Dave, and Judith are making a choice between a low risk, tried-and-true approach with little innovation, and a higher-risk, innovative approach that could provide competitive differentiation. Something similar is happening right now in hundreds of organizations around the world. It's always a difficult choice.

Commercial off-the-shelf (COTS) solutions are more likely to work, but they're less likely to give you the edge. Here are some thoughts to prepare you for the day when your turn comes to make this choice.

Compliance has a downside
An organization that overvalues compliance by its employees risks inhibiting their ability to innovate. Find a way to communicate to employees that compliance is important in some areas, and that creative differentiation is important in others. Off-the-shelf employees make an off-the-shelf organization.
You aren't buying a toaster
A toasterThe term COTS is misleading — it suggests near-zero risk, as if the project were a toaster. There are no guarantees in complex projects. If "…you want a guarantee, buy a toaster." [*]
Your situation is one-of-a-kind
Every product, service, and organization is unique. Their uniqueness creates risk. Using a vendor or technology that has been successful elsewhere isn't a mitigation strategy for the risks that arise from uniqueness.
To run ahead of the herd, you must leave the herd behind
To gain a competitive edge, you must do something different, something unique. Nobody ever got ahead by doing what everyone else was already doing.
Make uniqueness a strategy
Processes that won't differentiate your organization are candidates for COTS. But if you want to differentiate your organization, you'll have to do something different. Focus on processes that matter in a customer-visible way.

Customer expectations are rising continuously. What delights customers now will soon become the bare minimum. COTS helps you catch up when you're behind, but it can't put you in the lead. Go to top Top  Next issue: Games for Meetings: Part III  Next Issue

[*]
Order from AmazonNick Pulovski (character played by Clint Eastwood) in The Rookie. Dir. Clint Eastwood. Clint Eastwood, Charlie Sheen. 1990. Order from Amazon.com.

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