Practical Decision-Making Process
Here is a step-by-step evaluation and decision-making process for choosing between implementing an SAP Advanced Add-On Solution as a Commercial Off-The-Shelf (COTS) software or developing it in-house:
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Define Requirements:
- Gather detailed requirements for the SAP Advanced Add-on solution.
- Identify specific functionalities, integration requirements, scalability needs, and regulatory compliance.
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Assess Current Capabilities:
- Evaluate the existing IT infrastructure, skill sets of the IT team, and available resources.
- Determine if the organization has the expertise to develop and maintain a custom solution.
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Research COTS Solutions:
- Explore available COTS solutions, including the SAP Advanced Add-on Solution.
- Assess the features, functionality, support, licensing costs, and implementation timelines of each option.
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Cost-Benefit Analysis:
- Estimate the total cost of ownership (TCO) for both COTS and custom development options.
- Consider initial implementation costs, ongoing maintenance expenses, and potential future upgrades.
- Evaluate the ROI based on anticipated improvements in efficiency, customer satisfaction, and revenue generation.
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Evaluate Custom Development:
- Assess the feasibility of developing a custom SAP Advanced Add-On solution in-house.
- Consider the time, resources, and expertise required for development, testing, and implementation.
- Evaluate the risks associated with custom development, including potential delays, scope creep, and quality assurance.
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Vendor Support and Maintenance:
- Evaluate the level of support and maintenance provided by the COTS vendor.
- Consider factors such as availability of updates, patches, and technical assistance.
- Assess the vendor's reputation, track record, and customer satisfaction ratings.
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Scalability and Flexibility:
- Consider the scalability and flexibility of both COTS and custom solutions.
- Evaluate the ability to adapt to changing business requirements, technological advancements, and industry regulations.
- Determine if the chosen solution can accommodate future growth and expansion of the airline's operations.
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Integration and Compatibility:
- Assess the compatibility of the warranty management solution with existing systems, including SAP and other third-party applications.
- Evaluate the ease of integration and potential impact on business processes and workflows.
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Risk Management:
- Identify potential risks associated with both COTS and custom development approaches.
- Evaluate factors such as vendor reliability, software stability, security vulnerabilities, and compliance with industry standards.
- Develop mitigation strategies to address identified risks and minimize potential disruptions to operations.
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Decision Making and Documentation:
- Compile all evaluation criteria, analysis findings, and stakeholder feedback into a comprehensive decision-making document.
- Facilitate discussions with key stakeholders, including business leaders, IT team members, and external consultants.
- Make a well-informed decision based on the evaluation criteria, organizational priorities, budget constraints, and long-term strategic objectives.
Go No-Go
Based on this evaluation process, the organization can determine whether to proceed with implementing the SAP Advanced Add-On Solution as a COTS software or opt for custom development to meet its specific requirements and business objectives.
Numerical Evaluation Criteria
Here is a table with example numerical evaluation criteria for each item, followed by an algorithm to make a final decision based on the scores:
| Criteria |
COTS Solution |
Custom Development |
| Define Requirements |
8 |
7 |
| Assess Current Capabilities |
7 |
6 |
| Research COTS Solutions |
9 |
5 |
| Cost-Benefit Analysis |
8 |
6 |
| Evaluate Custom Development |
6 |
8 |
| Vendor Support/Maintenance |
9 |
6 |
| Scalability and Flexibility |
8 |
7 |
| Integration and Compatibility |
9 |
7 |
| Risk Management |
8 |
7 |
Algorithm for Decision Making:
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Calculate Weighted Scores:
- Assign weights to each criteria based on its importance to the organization's objectives (e.g., on a scale of 1 to 10).
- Multiply the score for each criteria by its corresponding weight to calculate the weighted score for both COTS solution and custom development.
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Total the Weighted Scores:
- Sum up the weighted scores for each option (COTS solution and custom development).
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Compare Total Scores:
- Compare the total weighted scores for both options.
- The option with the higher total weighted score indicates a better fit for the organization's needs based on the evaluation criteria.
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Consider Non-Numerical Factors:
- Take into account qualitative factors such as stakeholder preferences, strategic alignment, and organizational culture.
- Conduct discussions with key stakeholders to address any concerns or considerations that may not be fully captured in the numerical evaluation.
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Make a Final Decision:
- Based on the weighted scores and qualitative factors, make a final decision whether to proceed with the COTS solution or custom development.
- Document the rationale behind the decision, highlighting key factors that influenced the outcome.
Avoid Risk - Be Data-Driven
By following this algorithm, your organization can make a data-driven decision while also considering subjective factors to ensure alignment with broader business objectives and stakeholder expectations.