Claims managers and their IT partners are faced with a dilemma when it comes to making the decision to build or buy their next claims software solution. The choice, which is not always clear cut, affects nearly every aspect of the claims process, from a minor workflow improvement to the transformation of the entire claims organization. Making the wrong selection can create havoc resulting in unintentional, inefficient processes, hidden costs, and productivity loss.

When making the decision to build a claims solution, managers often use some common justifications such as getting the solution developed to a carrier's exact specifications and IT budget. By building in-house, the hope is that the carrier will get perfect alignment with current or desired future processes. If the solution only seems to require a one-time upfront payment, building might keep costs down while granting internal stakeholders control over the design and implementation of the solution.

When managers use conventional wisdom to justify a “buy” decision, it is usually because they believe that the external solution provider will be ready and able to implement the solution now. Additional common justifications include reduced initial cost of delivery, elimination of waiting in the IT queue, and leverage of innovations from across the industry.