bach consulting

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Make or Buy (MoB)

The question of "Make or Buy" has developed positively in software engineering for the use of COTS in past years. This means that "Buy"-solutions occure to be favoured in many decisions. Self-development is generally associated with being too complexe and expensive. bach consulting's solutions create transparency in this field for you to take the right steps. We deliver solutions for the following questions: 

  • Which solution is cost-effective: IT self-development or the implementation of COTS?
    (> bc MoB level 1 proprietary development vs. COTS software)
  • Should the solution be put through by an internal or external provider?
    (> bc MoB level 2 – internal vs. external service provider)

Criteria for a systematic "Make or Buy"-decision are next to transaction costs, the reliability of supply and the (unwanted) potential dependence on the supplier.

Abstract

The customer's targets are essential for the decision whether to 'make or to buy'. What is important to him? Time to market? The most cost-effective solution? How close is the solution to the standard?

The components of analysis include these targets. We will examine the scope of functions and determine the productivity for change and run if proprietary development (make) is the solution. Based on this expenses for development and maintenance can be evaluated.

For the standard solution (buy), we choose an extended procedure, which is made up of the following components: Licence costs, Maintenance costs, individual adjustments/customising, Interfaces and Release change.

  • Productivity for proprietary development
  • Time (FP/PM), costs (EUR/FP)
  • Productivity for COTS software
  • License costs, maintenance costs, individual customisations, interfaces, release change
  • Comparison of costs
  • On basis of life-cycle cost

The realisation is as following:

ActivityDescription
Kick-off
  • Specification of analysis targets
  • Form/content of data collection
  • Obtain a decision concerning the baseline (see option)
  • Project schedule
Estimation of productivity for proprietary development (> bc Productivity Change 1) 
Calculation of commercial-off-the-shelf software (COTS)
  • License costs
  • Maintenance costs
  • Individual adjustments/customising (> bc Productivity Change 2)
  • Interfaces (> bc Productivity Change 2)
  • Release change (> bc Productivity Change 2)
        QS Workshop
        • Clarification of open questions
        • Discussion of remaining issues with the customer
        Follow-upCorrections with regard to the QS Workshop will be amended
        PresentationThe handover of results
        a) in written form (presentation)
        b) as a group presentation for all participants

        The consultancy services of bach consulting consist of the following:

        • Moderation
        • Conduct of analysis
        • Assessment of effort PD, EUR and t
        • Documentation of results
        • Presentation of results

        The services are classified as four categories. The package "Individual" can only be evaluated after the initial briefing of volume and costs.

        Service PackagesVolume*)Duration
        Package 1:
        bc MoB Level 1 Small

        up to 100 FP

        2-3 days
        Package 2:
        bc MoB Level 1 Medium

        100 FPs < P <= 250

            5 days
        Package 3:
        bc MoB Level 1 Large

        250 FPs < P <= 1 000

          10 days
        Package 4:
        bc MoB Level 1 Individual

        P > 1 000 FPs

        >10 days

         *) Please take the initial costs for bc Productivity into account, if it is not available.

        Abstract

        When assessing step 2, the decision whether services are provided internally or externally depends on the availability of resources and which party is more productive in change and run.

        If step 1 of Make or Buy is already implemented there won’t be additional costs as the results of step 1 already imply this.

        • Evaluation of productivity of internal service provider
        • Proprietary development / COTS software
        • Evaluation of productivity of external service provider
        • Proprietary development / COTS software

        The realisation is as following:

        ActivityDescription
        Kick-off
        • Specification of analysis targets
        • Form/content of data collection
        • Obtain a decision concerning the baseline (see option)
        • Project schedule
        Estimation of productivity for proprietary development (> bc Productivity Change 1) 
        Calculation of commercial-off-the-shelf software (COTS)

         

        • Individual adjustments/customising (> bc Productivity Change 2)
        • Interfaces (> bc Productivity Change 2)
        • Release change (> bc Productivity Change 2)
              QS Workshop
              • Clarification of open questions
              • Discussion of remaining issues with the customer
              Follow-upCorrections with regard to the QS Workshop will be amended
              PresentationThe handover of results
              a) in written form (presentation)
              b) as a group presentation for all participants

              The consultancy services of bach consulting consist of the following:

              • Moderation
              • Conduct of analysis
              • Assessment of effort PD, EUR and t
              • Documentation of results
              • Presentation of results

              The services are classified as four categories. The package "Individual" can only be evaluated after the initial briefing of volume and costs.

              Service PackagesVolume*)Duration
              Package 1:
              bc MoB Level 2 Small

              bis 100 FP

              2-3 days
              Package 2:
              bc MoB Level 2 Medium

              100 FPs < P <= 250

                  5 days
              Package 3:
              bc MoB Level 2 Large

              250 FPs < P <= 1 000

                10 days
              Package 4:
              bc MoB Level 2 Individual

              P > 1 000 FPs

              >10 days

               *) Please take the initial costs for bc Productivity Change / Run Small, bc Productivity Change / Run Medium, bc Productivity Change / Run Large respectively bc Productivity Change / Run Individual into account, if it is not available.

              Do you have any questions regarding our solutions?

              +49 22 44 878 440