Introduction
The IT industry is among the fastest growing avenues of business and investment. It also bears an equal measure of risk and volatility and therefore requires informed and competent decision-making. The objective of any business is to make profit and this depends on the strategy adopted in managing and hedging against costs while keeping a reasonable margin of quality. It therefore falls upon the cio officer to make appropriate choices in as far as making or buying a product or service or constituent factor of production.
Literature review
Companies and industrial scientists have developed and recommended various schemes and approaches to the build or buy decisions. These have been all based on the situational analysis of each proponent hence making their strategies limited to a specific situation. Therefore, there is no foolproof method or formula to the issue. However, it is common ground among all these proposals as to the factors that a manager should consider before making a build or buy decision.
In line with the profit-making objective of the firm, the manager should evaluate the economic benefit of the existing or proposed outsourcing option. Clearly, the economic aspect lies heavily to influence the manager’s decision in as far as buying or making. The manager should obviously consider the cheaper of the options for implementation. This factor is however to be considered alongside other factors.
If he chooses to go fro an out sourcing option, he should also consider if the outsourcing option can be r negotiated in future. If the manager decides to go for an in sourcing option he needs to consider the costs involved in transitioning from the buy to the build option. If tit is the first time, the manager needs to evaluate the decommissioning costs of the building option. A build option also means that there will be an interruption in the IT resources within the organization and therefore a need for a re-evaluation of the department.
Undeniably, both options have their own benefits besides the cost. The outsourcing option for instance guarantees variety and quality since the outsourcing firms invest a lot of talent and expertise in the creation and provision of the product or service. A build option on the other hand is a cheaper option in the long run since it reduces the dependency of the business to external factors.
It therefore gives the business a competitive advantage by allowing it to alter the product to suit emerging trends at little or no cost. The manager should also evaluate the growth prospects of the build option in as far as talent expansion and growth.
Keeping all these in mind the general trend among companies has been to maintain equilibrium between their build and buy options. This involves outsourcing secondary services and building primary functions. This allows the firm to balance the level of external dependency while still making the best of the outsourcing options
Discussion
Designing and Building infrastructure is a costly and lengthy process. In an organization that has an existing outsourcing option, would consider the odds of switching from the existing option against the building option. The building of infrastructure also attracts a competitive advantage to the business and therefore is the more viable of option. If the infrastructure is pat of a primary function then I would go for a build option
Customer support is a secondary service to an infrastructure and therefore would be cheaper if bought from a vendor. This reduces the workforce involved in the infrastructure and cuts on costs. It is a growing aspect of the infrastructure that needs constant expansion and growth. The outsourcing option can always be renegotiated in the future (Buxbaum 2002, pp5-16).
Infrastructure maintenance is a recurrent cost in the organization. It affects the primary functions of the infrastructure and therefore should be internally sourced. It is cheaper and reliable if in sourced due to the effect on operations
Infrastructural upgrades are accessories that can always be replaced. The upgrades provided by a vendor have more quality and skill invested in them. It would therefore be preferable to purchase them from a vendor.
Decommissioning of infrastructure can go either way and therefore depends n the cost of either buying the service or performing it from within the organization. In most cases, however most firms prefer an in-house decommissioning option due to the value attached to the resultant salvage value.
The market for applications has gown greatly over the years especially due to the onset of android and cloud computing technologies. It has therefore received heavy investment by interested parts and development partners. The outsourcing option for applications has proven profitable and convenient since there are numerous application developers who have driven the outsourcing cost down. I would therefore consider adopting an outsourcing option in the short run.
Customer service for applications goes to the primary function of applications and therefore requires in-house attention control and regulation. In effect, I would prefer an in-house customer service strategy to ensure that the organization has a firm grasp of the operation of the organizations customer base.
Maintenance of applications is also an important aspect of application services. The organization therefore has a competitive advantage if it has its own personalized maintenance strategy since the risk of an in effective maintenance mechanism is far too high. It also allows the organization to identify and grow talent for future design purposes.
The development and improvement of an application requires an independent perspective. Developing upgrades from an in-house source limits the creativity and diversity. Outsourcing firms also invest a lot of resources and funds in developing new upgrades and therefore present the better option in as far as upgrades are concerned.
Since the preferred design and development method is an outsourcing option, it follows that the decommissioning of application is best done by an outsourcing firm or vendor. This saves the organization the overhead costs that accrue to decommissioning (McCall 2010, pp 13-29).
Conclusion
It is important to establish equilibrium in the strategy adopted while keeping a clear hedge between the implications and benefits of each option. The outsourcing option has however grown tremendously and continues to present pertinent advantages and alternatives to firms.
References
Buxbaum, Peter. Bringing IT back home. [2002]. Retrieved from: https://www.computerworld.com/article/2576557/bringing-it-back-home.html
McCall, Owen. Insource, Outsource, Everything as a Service. [2010]. Retrieved from: https://www.cio.com/article/2418837/insource–outsource–everything-as-a-service.html