A Benefits/Challenges Framework for Outsourcing Software Development

As the information technology industry grows, many companies are rethinking their approach to outsourced software development (OSD). This research uniquely explores the premise that many of the benefits of outsourcing software development are also challenging and many of the traditional challenges have beneficial aspects, as set out in a benefits/challenges framework. Additionally, the differences between anticipated/realised benefits and anticipated/occurred challenges are investigated. Ten companies who engage in OSD confirm the benefits / challenges framework in skills, cost, culture, development speed, quality, market proximity, employees and legal aspects of OSD. An unexpected OSD benefit was scalability, outsourcing that enables a company to rapidly scale up production; this is a novel contribution to the literature from this research. Cost reductions from OSD were seen as a significant benefit, but controlling unanticipated costs was also a major challenge, reflecting the paradoxical nature of OSD benefits and challenges fully explored in this research.