Outsourcing Software – The entire picture

In the last few years, outsourcing of IT services emerged as one of the most victorious tactics in the business world. According to one market research study, most American and European companies save around 70% of their development cost through outsourcing them. After ‘benefits of SEO’, The internet is flooded with content that clearly says how effective and beneficial offshore software development is, but nobody presents the complete depiction, showcasing risks and challenges, associated with it. In this blog-post, I tried to bring the complete picture in the light.

Primarily, there were very few companies that didn't want to understand the idea of in-house development and got inclined to contracting the software developing work. Over time, in-house development got out of the picture because from the age of big mainframes to the late 80s, many companies experienced an unprecedented growth in their developer staff. The dividing line was 1985 when Texas Instruments understood the potential of outsourcing, with the establishment of their subsidiary in Bangalore, India. During the 90s, software outsourcing immediately swapped in-house development, and by 1994, practices of software development picked up the pace. In the year 2000, worth of the North American outsourcing market was determined 101 billion American dollars.

American and European companies save around 70% of their development cost through outsourcing them 

In coming years, without a doubt, software outsourcing will be the first choice of businesses that want to leverage resources in technology domains at very reasonable cost. Without setting up an infrastructure in your company, there are no supplementary costs to be incurred, plus you can get your project completed within deadlines. As far as selection of offshore firm is concerned, Company’s track record can help you in determining their commitments, capabilities, professionalism, and skills. Though no quality standard is completely effective, yet ISO quality standards can still narrow down your offshore partner selection.

Being aware of few specific risks associated with outsourcing can control your choice of signing an OSD (offshore software development) contract because uncertainty about information confidentiality is becoming a growing concern in the industry. Developer sends files with source code to his confidential mailbox on the working server, but a security breach can ruin an entire convention, as it is still difficult to foresee and prevent total security. This problem could create a needless technological and managerial overhead, decreasing superiority of the future product, where uncertain financial payback can come in picture. Similarly, the delivered product can meet all the technical necessities but might turn out to be obsolete, not supporting some technologies or standards that appeared throughout the development period. Being deficient in controlling outsourced resources is foremost threats associated with offshore development.