Make-or-buy decisions
“Make-or-Buy Decisions” is an output for the process “Plan Procurement management”.
A make-or-buy analysis results in a decision of whether particular work can best be accomplished by the project team or needs to be purchased from outside sources. If the decision is to make the item, then the procurement plan may define processes and agreements internal to the organization. A buy decision drives a similar process of reaching agreement with a supplier for the product or services.
“Make-or-Buy Decisions” is an input for the process “Conduct Procurements “.
Organizations procuring goods or services analyze the need, identify resources, and then compare procurement strategies when deciding to buy. Organizations also evaluate the need of buying
products versus making the items themselves. Factors that influence make-or-buy decisions may include:
– Core capabilities of the organization,
– Value delivered by vendors meeting the need,
– Risks associated with meeting the need in a cost-effective manner, and – Capability internally compared with the vendor community.
This definition was found in the PMBOK V5
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