BUS206: Management Information Systems

When an organization decides that a new program needs to be developed, they must determine if it makes more sense to build it themselves or to purchase it from an outside company. This is the "build vs. buy" decision.

There are many advantages to purchasing software from an outside company. First, it is generally less expensive to purchase software than to build it. Second, when software is purchased, it is available much more quickly than if the package is built in-house. Software can take months or years to build. A purchased package can be up and running within a few days. Third, a purchased package has already been tested and many of the bugs have already been worked out. It is the role of a systems integrator to make various purchased systems and the existing systems at the organization work together.

There are also disadvantages to purchasing software. First, the same software you are using can be used by your competitors. If a company is trying to differentiate itself based on a business process incorporated into purchased software, it will have a hard time doing so if its competitors use the same software. Another disadvantage to purchasing software is the process of customization. If you purchase software from a vendor and then customize it, you will have to manage those customizations every time the vendor provides an upgrade. This can become an administrative headache, to say the least.

Even if an organization determines to buy software, it still makes sense to go through the same analysis as if it was going to be developed. This is an important decision that could have a long-term strategic impact on the organization.