Rollout Democracy blog

The Goldman Sachs effect and why campaign tech vendors should be worried (or not)

 ¨Trends, like horses, are easier to ride in the direction they are doing¨ said John Naisbitt, an American author and public speaker in the area of futures studies.

Prior to entering the political consulting industry and setting up Rollout Democracy, I began my career in the investment banking industry, where I specialised in trading platforms and other front-office technology solutions.

The emergence of disruptive technologies, such as cloud computing, made the banks realized that, in order to materialize the benefits of these new technologies, they needed to knock- on the door of the tech vendors that had developed the solutions, and license their products.

In a matter of years, the banks were able to simplify their technology infrastructure and, in doing so, transformed the way trading floors operated and interacted with other middle-and-back-office departments. Most crucially, banks decided to break down the different data silos that existed within their organisation (e.g. one platform for trading, another for credit-risk, another for market risk, and so on), and started to use fewer systems that were better integrated with the rest of the organisation. Unsurprisingly, the practical benefits of AI and Big Data soon started to materialize.

This trend could be observed in the largest industry players: UBS, JP Morgan, Santander, and many more made strategic decisions to simplify their technology infrastructure by undertaking ambitious technology and organisational transformation programmes, and, most importantly, by selecting one of the big off-the-shelf solutions offered by the tech vendors.

At this point, one could draw a parallel between this trend in investment banking and the situation of the campaign technology industry, where the main political parties, campaigns, and candidates have relied upon a number of tech vendors and implemented their solutions.

Let's go back to the investment banking industry, where there is one exception to the rule: Goldman Sachs (GS). The culture of the firm and the perception that the industry had all contributed to the idea that Goldman Sachs employees were always the “smartest guys in the room”.

GS didn’t hire external consultants and didn’t buy off-the-shelf products to run their business (although this wasn’t entirely true). And why would you do that when you feel your employees are the best? Their employees actively contributed to that feeling every time you met them at one of the bars in the City of London

Well, it’s been a year since I’m around the campaign tech industry, and I can already observe this trend taking place, at least, in Europe.

A few weeks ago, I attended a workshop on digital campaigning and fundraising organized by a leading political party in a large EU country. In addition to the presentations one would expect in this type of sessions about best practices, what worked well, what didn’t, etc., there was one session which I wasn’t expecting.

This presentation’s aim was to explain how that political party was in the process of building their own campaign software in-house and decommissioning one of the products from a leading tech vendors with whom they had been working over the past few years. They played the GS card ¨ if we have the smartest guys in the industry, why don't we build a solution in-house¨.

To be honest, the Build vs Buy decision isn’t something new in business, and it certainly isn’t new for political parties. What struck me was the fact that it wasn’t apparent that the party had performed a comprehensive evaluation of the vendors or, if they did so, that the result of such an assessment wasn’t an important factor influencing the final decision to “build” it in-house. The presenter conveyed the message that they simply could do better than any other competitor or tech vendor, because they were the ¨smartest guys in the room¨.

Don´t get me wrong, there are genuinely good reasons for a political organisation or campaign to go for the Build decision and invest in custom software. In short:

  • Off-the-shelf software cannot meet every need: if the organisation  has a set of very special requirements, canned solutions may be the better qualified to meet them.

  • Canned solutions are rigid: The vast majority of off-the-shelf software will not allow you to modify its functionality in a meaningful way. It may be difficult to add or subtract built-in features, leading to either too many or too few functionalities for your organisation.

  • Having the necessary skills in-house, including developing and programming, User Experience Design, project management, and similar, represents a big advantage

Equally,  there are good reasons to go after the “buy” solution, including the following ones:

  • Lack of time: if an election is coming and your campaign does not have enough time, then off-the-shelf software is the best way to kick-off cheap and fast, sometimes in less than 24 hours.

  • A good product already exists in the market: If you are running a campaign that just requires the usual features (volunteer management, fundraising, communications, etc.) then there are generally canned software solutions available that are already proven to be effective for this purpose.

  • Cloud-based solutions are scalable: this allows any organisation to start campaigning at a low cost, whilst keeping the option to scale up very quickly.

  • Low cost: For small and medium-size campaigns, the costs of licensing and maintenance are low when compared with the cost of making it (e.g. hiring developers, innovating, managing the product roadmap, etc.)

  • Improve the way you campaign: for certain organisations, the technology and the features they can access with off-the-shelf solutions is so advanced that using it will help them improve the way they operate and run campaigns

Whichever way, it is important that the decision is not made simply because “you feel like the smartest guy in the room”, but that you undertake a comprehensive analysis of your needs and strategic goals, and how the available technology solutions will help your organisation achieve them.

At Rollout Democracy we have developed the Rollout Vendor Evaluation Framework ®  for political campaign software, the objective of which is to help our clients make the “Build vs Buy” decision.

This evaluation framework is underpinned by a collaborative methodology to help our clients:

  • Firstly, define a set of parameters, high-level and low-level criteria that are relevant to their organisation. This includes making an effort to understand the capabilities and limitations that exists within the organisation and that will shape any future decision.

  • Secondly, navigate through the different technologies and vendors available in the market, and understand how each solution fits those predefined set of parameters and criteria

The final output is a report which includes:

  • The key findings from our work

  • A recommendation to Build or Buy

  • A detailed analysis of how each of the off-the-shelf solutions studied meet the predefined set of parameters and criteria (see sample report in the picture below)

If your organisation is in the process of addressing the “Build vs Buy” decision, then please do contact us first.

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