🔎📈 Upside Analysis: Teams' New Trend: Building In House Vs Buying 3rd Party Solutions Vs Hybrid Approach

Dear colleague,

We have been on the road since last July, catching up with teams at the 2023 NBA Summer league in Las Vegas, and then in Europe and more recently at the 2023 MLB Meetings and MLS Symposium and one major trend that we are now seeing from pro teams is the adoption of 3 types of strategies: (1) Teams building their own technologies (AMS, analytics platform) in house while (2) other teams chose to buy 3rd party solutions or (3) adopt an hybrid approach to leverage the best of both worlds. In the analysis we discussed why those respective strategies makes sense:

Source: Upside Global, Confidential, 2023

Why building in house solutions makes sense for some teams

It starts with the club’s culture

Let’s face it! Sometimes it makes sense for some teams to build their own solutions (e,g. AMS analytics dashboard) in house for one simple reason: The team’s culture. Some teams just want to build the majority of their technologies in house. They have done that for many years. This is the way they have operated for many years and there are no reasons for them to change that as it has worked for them over the years. We know a number of teams across the NBA, NFL, Laliga..Olympic teams, who do that. So again, it starts with the team’s culture driven with upper management.

It also comes down to having more control and wanting to build custom solutions

Another big reason why some teams choose to build their own solutions is because they want to have more control and build their own custom solutions. Another reason why some teams end up building their own solution is because sometimes some 3rd party vendors do not allow teams to customize their solutions. So typically the staff (engineers, UX design..) of those teams would design and build the solutions (e.g. dashboard, networks..) from the ground up. Also keep in mind that sometimes some teams have to pay extra to customize solutions from 3rd party companies which adds up to the overall cost that they would have to pay to deploy a third party solution. So in the end it ends up becoming quite expensive for some teams to adopt 3rd party solutions. And that’s why building their own custom solutions internally makes more sense financially for some teams.

Limited budget plays a key role. Building in house can also be lower cost sometimes

Annual performance tech budget can vary greatly from one team to another or depending on the leagues. For example, the majority of MLS teams, based on the data from our Upside tech scouting platform, tend to have an annual performance tech (wearables, GPS, HR monitoring, AMS..) budget less than $100,000 per year. For that reason it can sometimes be challenging for many of those MLS teams to buy a third party solutions that costs up to $50k-$75k per year when they have to pay for their GPS, HR monitoring systems in the first place. This is why some MLS teams have decided to build their own solutions in house.

As a result of that, some teams we work with also ended up hiring dedicated staff to build their own solutions instead of buying a 3rd party solutions. They also figured that the cost to hire someone to build a solution internally would be cheaper rather than buying a third party solution over time if they have to pay extra every time that have to customize the 3rd party solution.

Building in house solutions helps have more continuity and offset management’s changes

We have been working with pro teams (MLS, NBA, NFL, MLB..European soccer) for the past 10 years and in many occasions we have seen management changes with new coaches and staff coming into a new team. This is why building an in house solution can sometimes help have more continuity and offset management changes. Keep in mind that an internal solution would typically be built by the IT team who is not typically affected in case of top management’s changes.

Plus when a new performance staff comes in, the staff sometimes wants to bring into the club solutions that they used at their previous clubs. So by building in house solutions (e.g. AMS), it can help have more continuity regardless of which staff comes in because the new staff would have to use the in house solution.

Buying 3rd party solutions makes sense for other teams

On the other end it can sometimes make sense for some teams to buy third party solutions for a multitude of reasons:

Lack of expertise in house

One of the first reasons why some teams end up buying third party solution is the lack of in house expertise. Let’s face it! Some teams quickly realize that they don’t have the expertise and engineering resources in house to build complex solutions that meet their needs. On the other end some vendors can build complex solutions (advanced AI and algorithms) for teams.

Faster to deploy 3rd party out of the box solutions. Building your own platform is a full time job

The other factor that explains why some teams end up adopting 3rd party solutions is the faster timeline to deploy the solutions. Vendors can offer teams out of the box solutions that can be deployed quickly. For teams, time is in the essence. They need quick solutions to their problems especially when it is a matter of reducing their athletes’ injury, or accelerating the recovery process.

On the other end if a team decide to build a solution internally they have to (1) hire the proper staff (engineering, UX design) to build it, and (2) Build and test the solution from the ground up which can can 6-9 months from the design phase to the implementation and testing phase.

The point here is that building a solution in house requires manpower, time and resources. It is basically a full time job to build and maintain an in house solution.

On the other end, teams need to assign some staff members to handle the third party solutions. But adopting a 3rd party solutions can be less taxing one the teams’ staff rather than building a solution in house.

In addition a performance staff might chose to adopt a 3rd party solution in order to have its staff focused on other tasks (athletes’ care..) rather than allocating staff members on building and maintaining software which costs time and money.

Moreover, in some occasion some teams just don’t have the culture to build their own solutions in house. They just don’t have the manpower and resources to build solutions from scratch. Like we said before it starts with top management. If top management or the performance staff does not have the desire or appetite to build their own solution in house it is a non starter.

So in summary if the teams can deploy an out of the box solution in a couple of weeks or months it is a no brainer.

Staff members tend to bring 3rd party technologies into their new clubs

As we noted previously, when a new coaching staff comes in they sometimes tend to bring their own performance and medical staff. As a result of that it is not uncommon for performance and medical staff members to bring 3rd party solutions into their new club. Why? Because they are familiar with the solutions they previously used. They also don’t want to have to learn a new solution that they are not familiar with. As we noted previously, by bringing a solution that they are familiar with, they can be operational faster into their new club and focus on what they do best: Take care of their players.

There is a 3rd option: Hybrid approach

Now there is a 3rd approach adopted by teams. It is called the “hybrid approach” which consists in partially building their own solutions while bringing third party solutions into the club.

Why choose when you can get the best of both worlds

Some teams chose to adopt an hybrid approach to get the best of both world. They don’t have to chose. They can pick and choose where they build solutions in house while bringing outside solutions. Think of it as a “plug and play” approach. By doing so they can keep a level of control in house, build faster and cheaper custom solutions while leveraging outside expertise.

Hybrid approach enables teams to build hybrid in house solutions leveraging 3rd party solutions via API integration

Adopting an hybrid approach also requires a solid API integration policy. For example some teams end up using various analytics dashboards (e.g. AMS) built in house or by 3rd party companies. Then on top of that they end up building a “centralized” analytic dashboard leveraging a solid API integration with 3rd party solutions to triangulate various data points (biometric and statistical data..). Now the level of complexity varies to build such solutions and this is where having an internal IT team is critical to build it.

More flexibility while leveraging outside expertise

Going back to what we said earlier when we spoke about the “plug and play approach”, adopting an hybrid approach also enables more flexibility. When teams needs outside help and expertise they can do that. But when they want to keep everything in house to have a better level of control and customization they can do that at the same time depending on which area of the solution it is.

Less risky rather than relying 100% on in house solution

Adopting an hybrid solution can also be less risky for teams. What if an in house solution breaks and the team does not know how to fix it internally? That could become problematic. But if they use an hybrid approach they can leverage outside help and support to fix those issues when they need to.

Bottom line: Ultimately when it comes to building a solution within a team, one size does not fit all. Every team is different. And we always say to teams” Do what is best for you, and what fits your budget, requirements, needs and culture”. The good news is that there are various options out there. Teams have the liberty to do whatever they want. They know the pros and the cons of each approach (In house Vs 3rd party solutions Vs hybrid) and will choose accordingly. But one thing is clear: There is growing number of teams that are deciding to build solutions in house or adopt an hybrid solutions rather than buying out-of-the-box third party solutions.

With that in mind, because this is a timely topic in elite sports, one of our panels at our upcoming 2024 Paris Upside Sports Tech Summit which will take place in Paris on September 5, 2024, will focus on this particular topic: “Building in house Vs Buying 3rd party solutions Vs hybrid approach”. As part of that we will bring on this panel discussion some European and US teams that have used various approaches to discuss it and share their point of view on this particular topic. Stay tuned for more details soon!

You can check out our 2024 Paris Upside Sports Tech Summit in Paris by clicking on the button below. We will soon be announcing more details on the venue, speakers, and exhibitors, and more panel discussions.

We hope to see you there! If you are interested in attending, speaking, exhibiting, or sponsoring our 2024 Upside Summits in Paris and Miami,  feel free to email us at julien@sportscouncilsv.com or click on the button below:

As always, if you have any questions, feel free to reach out to me.

Best,

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