¹School of Information Systems, Technology and Management, The University of New South Wales, Sydney, Australia

Correspondence: Graham Cedric Low, School of Information Systems, Technology and Management, The University of New South Wales, Sydney 2052, Australia. Tel: +612 93854638; Fax: +612 96624061; E-mail: g.low@unsw.edu.au

Abstract

When developing an information system, organisations are faced with a fundamental choice: to buy a pre-developed package (potentially customise it or redesign/reengineer the business processes of the company concerned to fit the package), or to build the system in-house. Past literature has indicated the importance of the buy vs build decision to the organisation even suggesting that correctly managing the choice could be the key to managing IT. This research aims to identify the factors that an organisation should consider when making an information systems buy vs build decision. Interviews were conducted with 10 organisations across a spread of industries, involving key strategic IT decision-making personnel at the senior IT executive level. By examining the operational approaches adopted in each of these organisations and the key drivers behind these approaches, we identify the core factors that affect real-world buy vs build decisions in large Australian organisations with a turnover in excess of $750 million. We found that a number of core factors – strategy, commodity and competitive advantage, maturity, cost and requirements fit – critically affect buy vs build, while peripheral factors – risk, time and timing, political factors, and ongoing support – are secondary considerations.