Glad you included the target. Most people miss this. Without the clear objective/reasoning, we can't create a good framework :)
This is a perfect example of why you can't memorize frameworks! You have to come up with your own though process here. Here is one example. It is not the only approach.
Baseline - Current State
Objective: Evaualte our current state to determine baseline costs (both absolute and a measurement of "flexibility")
- Need current costs
- Staff, equipment, rent, legal, patent acquisition, etc
- Need other constraints
- Lack of flexibility in cost base
- Difficulty in getting talent / developing R&D?
- Siphoning of funds away from other important activities
- What is our cost of switching? I.e. what are our benefits with the current state?
- Yes, we want to reduce C, BUT to determine if it's a good idea we have to make sure the business doesn't fall apart/suffer as a result
- How do we currently make money?
- What are our profit puppies? Is it R&D (if so, high risk to outsource. If not, ok). What has the highest ROI in our companies?
- How big/small is R&A in the grand scheme of things from a Revenue/Cost side?
- What benefits do we get from having it in-house?(learnings, handover, shared skills, etc.)
Outsourcing - Future State
Objective: Evauluate our outsourcing option to determine expected costs (both absolute and a measurement of "flexibility")
- Need expected costs
- Annual fees/payments/contracts
- Need other benefits
- Flexibility in cost base
- No need to worry about it in-house
- Freeing of focus towards areas where we're really good at
- What is our cost of switching? I.e. what do we lose?
- Will outsourcing reduce the profitability of our other departments (i.e. do they rely on us doing this in-house)
- Are there other negative externalities to this decision?
- Fundamentally, we can't just assume that, because it's cheaper, it's better
- Do we still get the same product?
Cost-Benefit & Alternatives Analysis
Objective: Do the benefits of the future state outweight the costs? AND, are there better alternatives? We have to make sure that we get true cost savings AND do not hurt our ability to generate revenues/profits.
- Cost reduction in switch > loss of benefits in switch (if any)
- Can we do anything else? Could we do a Joint Venture, could we reduce costs another way? Can we make our R&D better as-is through different learnings.