Procurement Management Make-or-Buy Analysis

2893 words 12 pages
Assignment 1: Make-or-Buy Decision Analysis
Jacqueline M. Oxendine
PMAN 641 – Project Procurement Management
Professor Randall Napier
University of Maryland University College
February 13, 2011

Table of Contents Introduction 3 Methods of Make-or-Buy Decision Analysis 3 Hurdles to Overcome in the Make-or-Buy Decision-Making Process 9 Conclusion 11 References 12

Assignment #1: Make-or-Buy Decision Analysis All projects involve the need to determine whether the project work will be done in-house, external to the organization (outsourced), or a combination of the two. This is called “make-or-buy analysis” and is an essential part of project planning, as well as a tool/technique integral to procurement planning
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* the facilities required to execute the project? * the IT infrastructure (hardware and networks) and applications required for the project? * partners with the necessary resources? (this option would then require a procurement)
Schedule Analysis
Schedule analysis as part of a make-or-buy analysis can take many forms, much of it qualitative in nature. This type of analysis may performed to arrive at the answers to the following questions. * Is there a hard deadline (either negotiated or prescribed) for the completion of this project? If yes: * Will internal resources become available in time to meet this deadline? * Do the standard organizational procurement processes allow us to meet this deadline? * If the organization’s internal standard procurement process would take too long, is it possible to get an exception in order to use an abbreviate procurement process? * If a Federal project, do any special circumstances apply for which the Federal Acquisition Regulations (FAR), or other applicable legislation, allow for an abbreviated procurement? * Are there any financial incentives for finishing the project ahead of schedule? * Is schedule compression possible with any of the alternatives? * Is it possible to crash the schedule? That is, can the application of additional internal or external resources allow the project to be finished sooner? * Is it possible to fast-track any critical-path


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