Beal’s (the IT director for the company) strategy the company focuses on building software systems in house rather than outsourcing the development. Therefore, according to his vision the company can do much better by developing products in house. It enables them to get a better understanding of the work domain and the exact requirements of the product. Similarly, in house development will also help in reducing non functional errors, as most of the performance related metrics would be known prior to the coding phase.
On the other hand, recently the company has diverted from its long followed strategy of custom made in house products to buying vendor made products. Hence, the company has started to consider outsourcing as an option for the system development and acquisitions. The outsourcing of software products is proven from the fact that Mr. Beal purchased CRM software named Chordiant from a US supplier.
Hence, the two system acquisition techniques by Direct Line are classified as in house development and outsourcing. Both have their pros and cons, their importance can only be justified when both the techniques are applied to a business problem. Sometimes it may seem feasible to adopt in house development while in others outsourcing might prove to be more efficient.
There are numerous reasons for employing the in house development approach for software systems. These include efficient use of the programming and IT staff. By ensuring that products are developed in house the IT staff is not episodically involved rather they are involved throughout the development process and later in the support process. Other reasons include a better understanding of the problem domain and the associated work areas. Therefore, by developing systems in house the IT department can solve the problem more efficiently. Another benefit from in house development to the company is that the development is incremental and it can be easily integrated with the existing