A framework for managing software: Make or buy

Whilst research highlights the strategic importance of make or buy policies for goods and services, studies reveal that managers often treat make or buy as an operational issue. In the case of software, although make or buy decisions are crucial in determining the outcome of IT applications, little research into software make or buy has been undertaken. A framework for managing software make or buy is proposed within which software make or buy policies are formulated, based on the strategic importance of applications, and the relative skills of internal and external software sources. The planning of internal software development resources results in firms developing specialised skills, in response to increasing specialisation in the software market.