Finance and Sourcing · tool 5 of 7
Make-or-Buy Analysis
Make-or-Buy Analysis: decides what to do yourselves and what to bring in.
Best for: Sourcing decisions · Time: 2–4 hours
Domain: Finance · Focus area: Planning
How it works
Compare doing the work internally with buying it in. Look past price at skills, capacity, control, risk and how close the work is to your core strengths.
- Count total cost, including managing the supplier.
- Keep what differentiates you.
- Buying moves some risk; it doesn’t remove it.
How to apply it
- Describe the work.
- Cost both options fully.
- Score control, skill, capacity and risk.
- Decide and record why.
In practice
Buy the payment gateway; it’s a commodity. Build the pricing engine; it’s the reason customers come.
Pro tip
Include the hours you’ll spend managing a vendor. They’re rarely in the quote.
Quick check
What’s usually a good reason to keep work in-house?
Sources
- PMBOK® Guide, 8th edition, and The Standard for Project Management (PMI, 2025)
Last reviewed 2026-11-02 against the PMBOK® Guide, 8th edition · Practitioner review pending · How this guide is made