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 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.
Example Work Products
- Criteria for design and product component reuse
- Make-or-buy analyses
- Guidelines for choosing COTS product components
1. Develop criteria for the reuse of product component designs.
2. Analyze designs to determine if product components should be developed, reused, or purchased.
3. Analyze implications for maintenance when considering purchased or nondevelopmental (e.g., COTS, government off the shelf, reuse) items.
- Compatibility with future releases of COTS products
- Configuration management of vendor changes
- Defects in the nondevelopment item and their resolution
- Unplanned obsolescence