Evaluate whether the product components should be developed, purchased, or reused based on established criteria.
The determination of what products or product components will be acquired is frequently referred to as a “make-or-buy analysis.” It is based on an analysis of the needs of the project. This make-or-buy analysis begins early in the project during the first iteration of design; continues during the design process; and is completed with the decision to develop, acquire, or reuse the product.
Factors affecting the make-or-buy decision include the following:
- Functions the products will provide and how these functions will fit into the project
- Available project resources and skills
- Costs of acquiring versus developing internally
- Critical delivery and integration dates
- Strategic business alliances, including high-level business requirements
- Market research of available products, including COTS or SaaS products
- Functionality and quality of available products
- Skills and capabilities of potential suppliers
- Impact on core competencies
- Licenses, warranties, responsibilities, and limitations associated with products being acquired
- Product availability
- Proprietary issues
- Risk reduction
- Match between needs and product line core assets
The make-or-buy decision can be conducted using a formal evaluation approach.
As technology evolves, so does the rationale for choosing to develop or purchase a product component. While complex development efforts can favor purchasing an off-the-shelf product component, advances in productivity and tools can provide an opposing rationale. Off-the-shelf products can have incomplete or inaccurate documentation and may or may not be supported in the future.
Once the decision is made to purchase an off-the-shelf product component, how to implement that decision depends on the type of item being acquired. There are times when “off the shelf” refers to an existing item that is not readily available because it must first be customized to meet particular purchaser specified requirements for performance and other product characteristics as part of its procurement (e.g., aircraft engines). To manage such procurements, a supplier agreement is established that includes these requirements and the acceptance criteria to be met. In other cases, the off-the-shelf product is literally off the shelf (word processing software, for example) and there is no agreement with the supplier that needs to be managed.
Make Build/Buy/Reuse Decision
- Using the Build/Buy/Reuse Template, [the Project Manager] is responsible for documenting and analyzing the options.
- Using the Draft Build/Buy/Reuse Document, [the Project Manager], with support from the Project Team is responsible for developing Build/Buy/Reuse recommendations before the Defined Tollgate Review.
Verify Reuse Options
- Using the Draft Build/Buy/Reuse Document, [the Project Manager] with support from [the Project Team] is responsible for performing analysis to identify existing components within the organization that may be reused As-Is or that may be customized to suit the needs and update the Draft Build/Buy/Reuse Document.
- Using the Draft Build/Buy/Reuse Document, [The Project Manager] is responsible for evaluating the products/components with customization possibilities and complexity as additional criteria and and update the Draft Build/Buy/Reuse Document.
Conduct Market Analysis
- Using the Draft Build/Buy/Reuse Document, [the Project Manager] with support from the Project Team and consulting with IT Procurement, is responsible for studying availability of third-party COTS products when none of the organizational products/components suit the project needs.
- Using the Request for Information (RFI) Template, [the Project Manager], with support from the Project Team and consulting with IT Procurement, is responsible for submitting an RFI to gather additional input or consider the market reports.
Compare Multiple Products
- Using the Market Analysis Report Template, received RFI’s and the IT Standards Catalog, [the Project Manager] with support from the Project Team and IT Procurement, is responsible for evaluating the products and vendors when there are multiple COTS/customizable COTS product/components available and creating a Draft Market Analysis Report
- Using the Draft Market Analysis Report, [the Project Manager] consulting with the members of the Architecture Review Committee, as appropriate, and may schedule technical evaluations of the identified products by them and update the Draft Market Analysis Report.
- Using the Updated Market Analysis Report, [the Project Manager] is responsible for concluding with the Buy option based on the availability of suitable COTS products/components and update the Draft Market Analysis Report.
Conduct COTS Selection Review
- Using the Updated Market Analysis Report, [the Project Manager] with support from the Project Team and IT Procurement, is responsible for planning and conduct an initial evaluation, often in conjunction with an RFI, to assess the feasibility of candidate packages to meet minimal ‘To-Be’ process requirements.
- Using the Updated Market Analysis Report, [the Business Analyst], consulting with the requirements providers is responsible for analyzing and the agreed business requirements document for the COTS system being developed to further analyze and derive the Product Requirements.
- Using the Updated Market Analysis Report, [the Project Manager] with support from the Project Team and IT Procurement is responsible for planning the next steps for Request for Proposal (RFP) for acquiring the COTS, it’s Customization and Integration.
- Using the DAR Template, [the Project Manager] with support from the Project Team is responsible for developing a comparison summary for advantages and disadvantages of each selected COTS solution and present to the senior management before Define tollgate.
Make Build/Buy/Reuse Analysis
- Using the Build/Buy/Reuse Trade Off Study Template, [the Project Manager] with support from the Project Team is responsible for considering the build option when none of a COTS products or the internal reusable products/components are suitable for the project and create a Draft Build/Buy/Reuse Trade Off Study Document.
- Using the Build/Buy/Reuse Trade Off Study, [the Project Manager] with support from the Project Team and PMO is responsible for analyzing whether the project falls under Application Development or COTS project types when a buy or reuse decision is made.
- Using the Build/Buy/Reuse Trade Off Study, [the Project Manager] is responsible for obtaining approval from the Senior Manager and Enterprise PMO.
- using the approval from Senior Manager and Enterprise PMO, the Project Manager is responsible for communicating the project type of change to the QA Analyst and make necessary adjustments to the Project Plan, Project Schedule and IT Standard Bill of Material (BOM).
Communicate Build/Buy/Reuse Recommendation
- Using the Build/Buy/Reuse Document and Build/Buy/Reuse Trade Off Stuey [the Project Manager] with is responsible for For communicating build/buy/reuse recommendations to the Project Architect, Enterprise Architect, DBA, Data Architect, System Deployment Manager, Senior Manager, Operations and Support Manager, Process Engineer and Business Project Champion.