The decision of whether to purchase or develop in-house information systems is there for every firm.
Firms purchase I.S in order to allow them to:
- Gain Competitive Advantage(the ability to charge less for a superior product, better performance or to reach new markets.)
- Allow for operational efficiency within a firm(better use of resources and higher profitability within the firm.)
- To improve decision making(an example is real-time data, to the right people, have greatly improved the ability of managers to make decisions)
- Allow them to survive (Might be a necessity to keep up with competitors or changing regulations.)
In contrast organisations may develop in-house in order to:
- give the firm control!
- allow multiple developers to work on the same project simultaneously.
- allow easy changes within the I.S system, reducing the need for dedicated database administrators.
- save money.
There are advantages and disadvantages for both, on one hand a firm may feel that by developing in-house, they have no other firm or organisation to compare results to. Whereas by purchasing an I.S. they already have a community who have tried and tested the Information System.
Each firm has to weigh up their own set of circumstances to see which decision is the right one for them.