Technites

What The Tool Does

Technites focuses specifically on the make-or-buy decision at the operational level — not the strategic-capability question Strategos handles, but the more granular question of whether a specific function, process, or component should be done in-house or contracted to a provider. The operational make-or-buy decision is taken hundreds of times a year in most organisations, and the cumulative effect on cost structure and organisational capability is substantial.

How The Tool Thinks

The framework is transaction-cost-economic in orientation, distinguishing the conditions under which internal hierarchy is more efficient than market contracting. It examines asset specificity (how specialised to this particular task is the capability required), frequency (how often will this transaction occur), uncertainty (can a contract be written that anticipates the relevant contingencies), and measurement cost (can the quality of the service delivered be verified cheaply).

The tool is configured to resist two opposite fashions: the outsource-everything tendency that produces organisations with no internal capability and severe vendor dependency, and the build-everything tendency that produces organisations bloated with commodity functions that should have been bought for a fraction of the cost.

What It Can And Cannot Do

Technites can structure the make-or-buy decision and identify the specific considerations most relevant to the particular case. It cannot evaluate the specific quality of specific vendors, nor the specific internal capacity to build the capability in question. It also cannot manage the transition either direction — inhousing and outsourcing both require operational execution that the tool cannot substitute for.