Make or Buy Decisions:
Every organization needs to take a decision on whether to develop a part or a component in-house or buy it from external sources. These kinds of decisions are called make-or-buy decisions. Organizations make the evaluation by considering factors like cost of production (in-house), purchasing cost (external sources), quality, available capacity, reliability, etc. These decisions cannot be made solely by considering the economic factors as such decisions often involve acquiring or losing core competencies. Every such decision made by the company will have an effect on the production techniques adopted by the company, the working capital, the cost of debt, and the competitive position.
An organization that wants to install an MIS is also in the situation of having to decide whether to make or buy the MIS. It has to consider the following three alternatives or options:
- Building an MIS in-house
- IS Procurement
- IS Outsourcing
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