Make or Buy Analysis is one of the most important tools and techniques of the Plan Procurement Management process.
Make or Buy Analysis basically means figuring out whether you should be contracting the work or doing it yourself. Another way of looking at it is to consider whether you want to create your own solution or buy one that is already available.
The ‘Make’ Decision
- Less costly
- Easy fitment or integration in current systems
- Available suppliers are unreliable or unable to serve
- Utilize existing resources that have bandwidth available
- Maintain control over the solution and thus maintaining confidentiality
The ‘Buy’ Decision
- Less costly
- Suppliers have better skills than you do
- Get more than one vendor on-board
- Smaller volume required
- Reverse engineering opportunity
Of course there are other questions to consider while making this decision, for example, how will this decision impact the schedule, cost, scope and quality of the project? However, there are some resources like heavy equipment which is always better to rent or lease instead of buying or creating especially if they are to be used only once
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