Question

How does an organization know when to do (create, deliver or design) something within the organization, versus when to buy it form external suppliers (outsource it)? Explain in detail

Answer 1

The organization should look at one primary factor i.e. if the product or service that it is trying to create is the core competency of the organization then it should definitely create and design it in house i.e. it should not be outsourced because it is the core competency of the organization whereas any process which is not the core competency and is consuming more resources and cost then it should be outsourced.

Example: The core competency of Alibaba is not the calling process and hence it is outsourced i.e. call center is not something that is a part of their primary business model.