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.

Refer to the Requirements Development process area for more information about determining the product and product component requirements.

Refer to the Requirements Management process area for more information about managing requirements.

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

The make-or-buy decision can be conducted using a formal evaluation approach.

Refer to the Decision Analysis and Resolution process area for more information about defining criteria and alternatives and performing formal evaluations.

As technology evolves, so does the rationale for choosing to develop or purchase a product component. While complex development efforts may favor purchasing an off-the-shelf product component, advances in productivity and tools may provide an opposing rationale. Off-the-shelf products may 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, the requirements are used to establish a supplier agreement. There are times when “off the shelf” refers to an existing item that may not be readily available in the marketplace. For example, some types of aircraft and engines are not truly “off the shelf” but can be readily procured. In some cases the use of such nondeveloped items is because the specifics of the performance and other product characteristics expected need to be within the limits specified. In these cases, the requirements and acceptance criteria may need to be included in the supplier agreement and managed. 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.

Refer to the Supplier Agreement Management process area for more information about how to address the acquisition of the product components that will be purchased.

Typical Work Products

1.    Criteria for design and product component reuse

2.    Make-or-buy analyses

3.    Guidelines for choosing COTS product components

Subpractices

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, and reuse) items.