A process model of make-vs.-buy decision-making. The case of manufacturing software

The study has found that make-vs.-buy decisions are treated in various ways, and of special interest is the recognition, in some organizations, of make- vs-buy decisions as opportunities to develop or support competitive advantage.

Abstract

The decision to develop (make) a product or process internally or to purchase the relevant technology (buy), an issue facing many organizations, is discussed. What has been written about make-vs.-buy decisions usually consists of generic checklists of dubious relevancy to the decision maker's specific situation. Development of a process model based on a class of such decisions is therefore desirable. In-depth cases studies in seven organizations were conducted, guided by a series of key issues pertaining to the process of strategic decision making. Experience gained at eight other sites added to the analysis and development of a model. The study has found that make-vs.-buy decisions are treated in various ways. Of special interest is the recognition, in some organizations, of make-vs.-buy decisions as opportunities to develop or support competitive advantage. In such firms, the entire approach and decision-making style are oriented towards achieving such an advantage.>