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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One example of how EIA can affect a make-or-buy decision: As part of the many make-or-buy analyses done for the Secure Border Initiative (SBI) Tactical Infrastructure Program, it was determined that some of the Border Fence construction contracts would be awarded to HUBZone-certified small businesses to help economically strengthen areas of the U.S. that have a history of being economically depressed. (This also was to help fulfill goals in Federal legislation, but [HUBZone program faces economic uncertainties, 2011].)
Technical Analysis
Technical analysis covers both the scope of the project (what is to be done) as well as the techniques, tools, and methodologies required (how it is to be done). Technical analysis may cover the following areas.
High-level scope definition. What does the scope of the project encompass? All project planning must begin with scope definition. According to Fleming (2003, p. 26), scope definition should include the identification of all make-or-buy choices that need to be made.
Alternatives analysis. Are there multiple ways to achieve this scope? If so, what are the pros and cons for each alternative?
Engineering analysis. What skills, techniques, tools and/or methodologies are required to execute this scope?
Resource Analysis
Resource analysis to support a make-or-buy decision may seek to answer the following questions.
Does the organization have: * people with the required skill
The concept of project scope may be one of the most ample in project management. It involves objectives, limits and intentions. Every requirement in a project as well as its characteristics must be dealt with when planning the scope. Even though it 's reasonable to say that every project is unique, the causes for which it fails are generally the same. And if you already know what these causes are, you can minimize the likelihood of problems being repeated and thus increase the chance of success.
When implementing project 1, you face technical and market risk. How would you assess the risks embedded in Project 1?
IBM Daksh India is one of the most important business process outsourcing companies in India. It has been playing a significant role in the process transformation and management sections of one of the leading IT firms of the world, IBM since 2004.
| |collection of data, the evaluation of projects, and the reevaluation of prior decisions. |
Procurement intends to explore supply market opportunities and to implement resourcing strategies that deliver the best possible supply outcome to the organization, its stakeholders and clients (Kidd, 2005). Therefore, construction procurement exists to purchase a construction project as requirement of firms or organizational entities to achieve its goals. However, the choice to use external resources is the part of firms’ decision-making
Defining scope: it refers to determining where and on what all efforts will be focused during the lean event. Two recommendations are made in this regard: first, to include what is not included in the scope so the team do not lose track from their focus; and second, to set a realistic scope for the event.
Enterprise analysis is a key knowledge area in the practice of business analysis. During enterprise analysis, the business analyst identifies business opportunities, builds a business architecture framework, and determines the best project investment path for the enterprise. From this, the business analyst puts forward a business case, which provides an overall justification for the project. In this course, learners will examine the collection of preproject or early project activities and approaches for capturing the necessary view of the business to provide context to requirements and functional design work for a given initiative and/or for long-term planning. This
One approach to take in evaluating this issue is a Consequentialist approach. One consequentialist approach, and the most widely used, is Utilitarianism. Utilitarianism makes it a point to follow a decision that provides the greatest good for the greatest number of stakeholders (Ch 4 Powerpoint, 2010). In order to do evaluate the situation in this context, Felipe must first determine the positive and negative outcomes for the parties involved. Second, he must be able to predict what
As globalisation becomes more of a commonplace, outsourcing has become a significant strategy for a company to consider when managing a project. Apart from that, many organisations have also assigned some of their projects to external parties due to intense competition in the market (Hamel 2014).
Project Managers will obtain a holistic view of the project and the detailed definition of project boundaries will integrate and enable consideration of technical organization, personnel and marketing objective in the project, in other words all aspects around the project. (Cleland 1994)
In order to assess the the contractual/ legal issues involved due to the problem, it is necessary to understand the procurement approach undertaken for the project. The project endorses traditional procurement approach where Architect is acting as the client’s Superintendent. According to CRC (2004) traditional approach involves consultant that are appointed for designing and cost control by the client, while the contractor is responsible for carrying out the works.
Supplier relationship management is a comprehensive approach to managing an enterprise 's interactions with the organizations that supply the goods and services it uses. The goal of supplier relationship management (srm) is to streamline and make more effective the processes between an enterprise and its suppliers just as customer relationship management (crm) is intended to streamline and make more effective the processes between an enterprise and its customers. Srm includes both business practices and software and is part of the information flow component of supply chain management (scm). Srm practices create a common frame of reference to enable
To select a suitable procurement strategy for a construction project, there are some issues which need to consider. From all of those issues, there are 3 big issues that mainly affect the selection decision which are time, cost and quality. There is several type of procurement strategy available in market that commonly used for construction project and each of the common method will be analyze and compare to find the most appropriate method for this project. The choice of procurement strategy is very important to the success of a construction project. Therefore, the characteristic of each strategy have to analyze and also its relative advantages and disadvantages. A recommendation of most appropriate procurement
Outsourcing is contracting out with third party for a product or service. Sometimes, outsourcing employees from one firm to another is also possible, when an organization lacks in skilled persons and technologies. Outsourcing tools are used by owners to run a better facility and by facility managers to build a better career. The most common areas of facility management that are used to outsource are custodial, landscaping, system maintenance, construction, engineering and management of property. Outsourcing has become one of the most important knowledge areas of project management, which is increasing with pace. Outsourcing facilities first began at banks and expanded for manufacturing, utilities and healthcare. As the outsourcing brought into light over time, risks began to arise. Common risks involved in outsourcing are improper communication between client and vendor, imperfection in project scope and improper specification of requirements. Although risks lead to outsource disasters, it depends on how well the strategies for managing them are carried out. Outsourcing buyers look for meeting triple constraints neglecting triple constraints. Automation could resist organizations from outsourcing but, trends in outsourcing bring the market value for outsourcing.
This chapter presents the information gathered from the previously discussed methodologies for the purpose of analysis. In this chapter you will see the Time Context, Point of View, the statement of the problem focused in our case study, objectives, areas of consideration, Alternative Courses of Action, Decision matrix and the Cost Benefit Analysis.