attractiveness of an outsourcing price
order to calculate how cost-effective is a price quote received from an
external outsourcing contractor, Price boundaries need to be calculated:
Top Margin - by using the method for Estimating a price quote and schedule for a Future project
Outsource Margin - by using the method for Estimating a Future project schedule
and cost for internal budget
the Top Margin to determine the maximum price you should pay, if the
price quote is higher it is wise to consider a price quote from another
contractor, or develop in-house.
Use the Outsource
Margin to determine the price where outsourcing is more cost-effective
than developing in-house, though obviously cost is not the only merit
to be considered when developing in-house.