You can also conduct a preliminary make-or-buy analysis,
which helps to determine whether it’s better to obtain a deliver-
able or group of deliverables from within the company or from
an outside source. A make-or-buy analysis should examine this
issue from three perspectives:
- By performing direct cost comparisons.Normally cost is
the primary consideration in a make-or-buy analysis.
Comparing costs should be fairly straightforward and the
calculations should be relatively routine. - By considering critical factors. There are many factors
beyond simple dollars and cents, such as attributes of the
group providing deliverables, such as cost, delivery, quali-
ty, reliability, and so forth. These factors can be included
in a weighted factor scoring matrix. This approach may
include any number of different factors - By applying appropriate filters or constraints.Certain con-
ditions might exist that would eliminate a given choice—
make or buy—even if that choice is feasible and/or cost-
effective. Here are some examples of filters or constraints
(some might call them “show stoppers”):- Specific legal concerns
- A need for confidentiality
- The need or desire to maintain direct control
- Significant excess capacity currently in your organization
- Outsourcing the function generally unadvisable
Fourth, Formally Launch the Project
OK, let’s review. We’ve identified the true need, determined the
best way to satisfy that need, described how we’re going to
carry out the solution, and developed a sense of how much the
solution will cost, how long it will take to carry it out, and who
will be working on it. At this point, some sort of formal authori-
zation and/or funding approval may be required before the proj-
ect can proceed.
Defining Your Project 71