Development Strategy
Make or Buy : Cost Benefit Analysis
The IT team at Game Technology is considering several software acquisition options for their Customer
Contact Care system (C3). The options are two commercial software packages and an in-house
development option. They have prepared the following summary.
All three options require a six-month period for acquisition or development, installation, configuration,
and data loading. This period is called year 0. Actual operation begins in Year 1. Using Microsoft Excel,
you are required to help the team to complete the following tasks:
1. Prepare costs and benefits analysis for each of the options using ROI and NPV. Use an 8%
discount factor
(40 marks)
2. Which option do you recommend to the team? Justify your recommendation.
(10 marks)
(Total marks = 50)