ANDREW TAYLOR ON "RENT, BUY, BUILD…"
Submitted by Tommer on November 18, 2009
A short post on the Artful Manager that addresses some big questions…
When a for-profit enterprise wants to build its capacity to do something (manufacture a product, launch a new service, provide a new option for their clients, or the like), they face a classic business question — should we rent the capacity, buy the capacity, or build the capacity?…..
The answer to a rent, buy, or build question is usually determined by the math (which pays the highest return on investment over an identified period) and by the strategy (will owning the process give us a strategic advantage, or will renting keep us quick on our feet). But smart businesses recognize and engage the choice whenever such decisions present themselves.