Outsourcing Your IT Software Project

Why monitor outsourcing?

While outsourcing the development or maintenance of your software project appears cost-effective, it does present challenges.  Common issues with outsourcing include:

-higher cost than anticipated

-increased time to market

-increased defects

-reduction in customer satisfaction

-lower quality controls than in-house development or maintenance

It is important to monitor your outsourced project to ensure that all standards and requirements continue to be met.

How to monitor your outsourced project

To monitor your outsourced project, calculate your project baseline.  This could be done using:

-The ISBSG Industry data.

-History of in-house development productivity. This would provide the strongest position of determining the most realistic value

-First year of service provider development productivity

This could be the basis on which your annual targets, bonuses and penalties are derived.

These objective provide real incentives for productivity improvements so that all the objectives of outsourcing are met.

A further extension to the agreement between outsourcer and service provider is for the service provider to be paid for each FP delivered.  This may have the impact of only focusing on productivity and less on quality and customer satisfaction.  For this to occur the service provider must have extensive experience and confidence on their productivity measures to agree to being paid per FP.  Also the outsourcer should also have knowledge of the correct price/FP for their specific application at or least obtain the price/FP from specialist consultants that can undertake work to provide the answer.