Technology sourcing: the link to make-or-buy

Summary form only given. The aim of this paper is to explore technology sourcing options relevant in make-or-buy strategy with illustrations from theory and practice. Today's global competition forces manufacturing companies to re-evaluate their existing processes and technologies in order to focus on strategic activities. This issue has created an awareness of the importance of the make-or-buy decision and its long-term impact on the organisation. Undertaking make-or-buy decisions requires an analysis of in-house and outside manufacturing technologies and capabilities. Therefore, companies should be able to understand and identify the way the technology portfolio should be built in order to balance in-house and outsourced technologies. This paper discusses the different options for technology sourcing resulting from the importance/competitiveness matrix. This matrix indicates a range of sourcing options as a result of technology process analysis in terms of: importance of the technology to the business. The ability to influence the business key success factors; and competitiveness with which the technology is deployed. This involves assessing the company's level of performance in the use of technology against potential suppliers or competitors. In particular, a critical dimension for technology sourcing, the technology life cycle, is presented, emphasising the importance of understanding and monitoring the life cycle of technologies. This paper particularly shows the critical importance of technology life cycle consideration in the choice of technology sourcing options.