In the four-step process for Make, Lease or Buy, which is the first step?

In the four-step process for Make, Lease or Buy, which is the first step?

• A. Define the outputs being analyzed
• B. Determine costs that will be saved if outsourcing
• C. Compute the costs of contracting from the private sector
• D. Compare the difference and make a decision

Answer: (A)

Defining the outputs being analyzed sets the scope and frame of reference for the entire Make, Lease or Buy assessment. By specifying exactly what must be produced, the required performance levels, quantities, delivery timelines, and quality standards, you create a single, shared target that all options (in-house, leased, or contracted externally) must meet. This clarity ensures later cost comparisons are meaningful and apples-to-apples, so you’re evaluating the same need rather than different or overlapping requirements. With the outputs clearly defined, you then consider the potential benefits of outsourcing, which is the costs that could be saved by moving work outside. After that, you compute the actual costs of contracting from the private sector, and only then do you compare the differences to make a decision. This sequence keeps the analysis grounded in the defined need and supports a reliable, compare-and-decide outcome.

Defining the outputs being analyzed sets the scope and frame of reference for the entire Make, Lease or Buy assessment. By specifying exactly what must be produced, the required performance levels, quantities, delivery timelines, and quality standards, you create a single, shared target that all options (in-house, leased, or contracted externally) must meet. This clarity ensures later cost comparisons are meaningful and apples-to-apples, so you’re evaluating the same need rather than different or overlapping requirements.

With the outputs clearly defined, you then consider the potential benefits of outsourcing, which is the costs that could be saved by moving work outside. After that, you compute the actual costs of contracting from the private sector, and only then do you compare the differences to make a decision. This sequence keeps the analysis grounded in the defined need and supports a reliable, compare-and-decide outcome.