ProjectCodeMeter
Evaluating the
attractiveness of an outsourcing price
quote
In
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
planning
Use
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.