The Secret to Successful Software Innovation Projects

Building your own software seems nuts these days. But these CIOs from NYSE, KKR and Alcoa are doing it anyway. Why? To gain competitive advantage.

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Enterprise software has long been available, neatly packaged, for all core corporate functions. And now, in the age of cloud computing, it can be turned on and off like water from a spigot. Outsourcers run our data centers, technology is for sale at discount warehouse clubs. And still, some CIOs choose to build major software from scratch. Why?

Creating competitive advantage is the goal of many IT innovation projects, and in some cases you can’t achieve that without building your own systems. The New York Stock Exchange (NYSE) Euronext and its fierce rival Nasdaq OMX, for example, run custom-built trading systems that they continually tweak for stability and speed.

Other companies elect to build software because they must support unique business processes. That is the case for Alcoa, a $21 billion company that manufactures aluminum sheets that will become products as varied as beer cans and airplane exteriors.

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