Make or Buy Decision
The choice between developing versus purchasing software often is called a make or
buy, or build or buy decision. The company’s IT department makes, builds, and develops
in-house software. A software package is obtained from a vendor or application service
provider.
The package might be a standard commercial program or a customized package
designed specifically for the purchaser. Companies that develop software for sale are called
software vendors. A firm that enhances a commercial package by adding custom features
and configuring it for a particular industry is called a value-added reseller (VAR).
Software packages are available for every type of business activity. A software package that can be used by many different types of organizations is called a horizontal
application. An accounting package is a good example of a horizontal application
because it can be utilized by many different businesses, or separate divisions that exist in
large, diversified companies.