its better to buy

Question:

Manny’s Manufacturing must decide whether to build or buy a software package to keep track of its inventory. Manny’s computer experts estimate that it will cost $325m000 to buy the necessary programs. To build the programs in-house, programmers will cost $5,000each per month. What factors should Manny consider in making his decision? When is it better to build? To buy?

Making decision is a matter of life and death. If we want our business to be effective, we need to be able to make good decisions. If we can learn to this in a timely and well considered way, then we can have well-deserved success.

In a business, being practical is a great factor to success. Based on the situation, it is particularly powerful if you have a number of good alternatives to choose from and many different factors to take into account. This makes it a great technique to use in almost any important decision where there isn’t a clear and obvious preferred option.

I think Manny should try getting a list of options and the factors which is need to be considered. Manny should take into consideration the people who will be working if the system will be made in-house and the allotted time to finish the entire program. Since it is not clearly stated if how many peoples are involved in the said projects, we just need to think of the other possible reasons.

When we are referring to big businesses, outsourcing is more illustrious. It is because it improves the quality through contracting out the service with a new service level agreement. They have an access to operational best practice that would be too difficult or time consuming to develop in-house. When big companies outsource their information systems they will have an access to a larger talent pool and a sustainable source of skills. Outsourcing is subcontracting a process. It involves the transfer of the management or day-to-day execution of an entire business function to an external service provider.

Regardless the fact we can minimize the cost if we hire people who will build the software, I would still recommend that Manny will buy software for the main reason that outsourcing offers a lot more.

It is also an ideal tool comparing apples with oranges, such as whether to invest money to buy software of to build it in-house. This makes it easy to choose the most important problem to select that will give the grates advantage