Case Study: Make-Or-Buy Decision at Baxter Manufacturing Company

Pages: 3 (901 words)  ·  Style: APA  ·  Bibliography Sources: 3  ·  Level: College Senior  ·  Topic: Business  ·  Buy This Paper

¶ … Make-Or-Buy Decision at Baxter Manufacturing Company

For the manager at the Baxter Manufacturing Company, the decision of buying vs. internally making the software application is not an easy one. There are several arguments defending each possibility. In favor of buying for instance, the following are notable arguments:

- Purchasing a software application is less complex than making it; the company would just give the money to the software vendor and have the system installed in no time, whereas in the case of internal development, they would spend more money and the duration until completion would be significantly increased

- The Baxter Manufacturing Company would not be making the purchase from a random buyer. But from a long-term partner -- the Effective Management Systems (EMS)

The vendor would offer complementary services in the form of software installation, training to the BMC staff members, software maintenance, as well as several change possibilities

- By all accounts, the purchase of an already developed software application is less costly than the development of a new one

- The software purchased off the shelf has been more intensively tested and is as such more reliable than the internally developed one (Small Business Resource Center, 2006).

In favor of internally making the EMS, the following arguments are noteworthy:

- The company has had negative experiences with purchasing software (it is nevertheless true that they have learned form the respective experiences)

- The alternative of buying implies an enhanced dependency on the software vendor, who would have to install the application, offer training and continual support; if they are poor in doing this, the entire organizational system would be negatively impacted

- The company's Management Information System division has had some positive experiences with internally developing applications

- They could as such put their expertise to good use and create a software application tailored to the specific needs of the Baxter Manufacturing Company; this level of customization could not be obtained through a purchased application

- Considering that the software breaks down, the internal MIS would be more efficient in quickly repairing it, than the external vendor

- The support from the vendor implies that he will have access to confidential information on BMC

- The internally developed software is more flexible than the purchased one and can more easily be adjusted even after it has been instated

- The alternative helps save money by not subjecting to the demands of the vendor to purchase features and modules that would never be used (Small Business Resource Center, 2006).

Given the arguments in favor of both possibilities, the decision of the managerial team at Baxter Manufacturing Company is a difficult one. Nevertheless, constructing on the beliefs… [END OF PREVIEW]

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Make-Or-Buy Decision at Baxter Manufacturing Company.  (2010, January 15).  Retrieved September 17, 2019, from https://www.essaytown.com/subjects/paper/make-buy-decision-baxter-manufacturing/553651

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