Essays on Potential Problems Associated with Outsourcing Software Applications Case Study

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The paper 'Potential Problems Associated with Outsourcing Software Applications' is a great example of a Business Case Study. Outsourced systems applications can offer important business benefits over in-house developed software in many situations. Jens Dibbern (2004, pp 215) asserts the cost-effectiveness of outsourced applications in maintenance, labor, and supports cost as reduced or avoided entirely. The potential benefits from outsourced technologies can be broken down into two areas, the first relates to the quality of the deliverables while the second relates to the reduction of risk during the project. On the first account, improved quality of development work includes the acquisition of superior or sophisticated specialist resources, which would rather have not been available locally or developed locally.

It saves the organization time taken to acquire new systems. This process of system implementation avoids the conventions Systems Development Life Cycle which is time inside. Staff also get minimally involved as they are only trained on how to derives quality from the outsourced application or utilize the software. It is easier to incorporate existing facilities teams with established software development processes in place (Ash J.

et al, 2000: pp 118). The other array of benefits from outsourced software applications is associated with the reduced risk of failure and cost. By outsourcing, the organization reduces the cost of development and tight control over project resource costs. This process also enables the company to reduce permanent staff cost as well as reduced training costs. There will be no need for employee support staff who will be maintaining an outsourced system unlike in in-house software applications development. This thus provides an opportunity to reduced management costs since the system will be managed offshore (Aydin et al.

1998 pp 64). Outsourcing suppliers have a stake in delivering a high-quality solution within time and budget agreed. Testing and reevaluation of systems development and its budget is not a problem since the budget does not have to be adjusted the way it often occurs in the SDLC process. Once the supplier has been identified, and all terms agreed, there is a shorter lead-time for recruitment and training of system users. Most outsourcing companies are seasoned suppliers and hence by outsourcing an organization can enjoy quality service from experienced project management.

The process of developing an outsourced service largely depends on the nature of the understanding of the customer and the supplier. The success or failure of the process is a product of how the two parties understand the objective and the requirements of the new system (Dibbern, 2004 pp 121). Potential problems associated with outsourcing software applications Martin-Barrera and others (1999 pp 75) caution that While there seems to be a wide array of benefits from outsourcing application, the process may inherit several problems of human integration into the company’ s IT processes; slow, costly, and error-prone responses to issues.

Outsourced software development can introduce issues for the project and the long-term success of the resulting solution. One most likely problem is miscommunication due to differences in language and culture. Potential problems can be broken into two categories. The first set of potential problems affects the running of the project itself, whilst the second effect the support and maintenance of the solution once delivered. There is a serious risk of poor understanding of customer business objectives and software requirements by the supplier.

Due to the geographical distance and cultural setting differences, there may be poor communication between supplier and customer during the development period. Another potential challenge is the failure to agree on ownership/licensing issues prior to the delivery of the developed applications. The cost of updating and maintaining the systems may also be contentious. The greatest danger is the lack of in-house solution knowledge to faults in the systems. This may result in the long term before a problem is diagnosed and solution fixed, even if the fault is a minor one (Lorenzi, and Riley, 2000 pp 119).


List of References

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2. Aydin C. E, Anderson J. G, Rosen P. N, et al. 1998. Computers in the consulting room: a case study of clinician and patient perspectives. Health Care Manage Sci.; pp 61–74.

3. Dibbern J., 2004. The sourcing of application software services: empirical evidence of cultural, industry and functional differences. Germany: Springer Press, pp 214-218.

4. Lorenzi N. M., & Riley R. T. 2000. Managing change: an overview. Jam Med Inform Assoc.; Volume 7: pp 116–24.

5. Martin-Baranera M, Planas I, Palav J, Miralles M, Sancho J. J, Sanz F. 1999. Assessing physicians’ expectations and attitudes toward hospital information systems. The IMASIS experience. MD Comput. Volume 16: pp 73–6

6. Nicholson L., Vakharia A. J. and Erenguc S. S. April 2004. Outsourcing inventory management decisions in healthcare: Models and application. European Journal of Operational Research, Volume 154, Issue 1, 1, pp. 271-290

7. Saia R., & Kastner P.S., 2006. “Outsourcing Application Development and Maintenance”, Aberdeen


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