Badly-managed offshore software development costs firms millions

Poor governance of offshore software development is costing businesses millions of pounds, according to a study by Meta Group.

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Poor governance of offshore software development is costing businesses millions of pounds, according to a study by Meta Group.

The survey of 150 European IT directors, commissioned by software supplier Compuware, found that businesses were failing to invest in the management and legal framework required to support offshore development contacts.

Peter O'Neill, vice-president of consulting at Meta Group, said, "Lots of companies are sending [project] specifications to offshore outsourcers on the vague presumption they will save costs."

He said, in most cases, users did not possess enough information on current application development costs to assess whether outsourcing was cheaper.

O'Neill warned that offshore development work increased project complexity and required additional quality assurance procedures.

Nearly 80% of those surveyed failed to invest in a combination of in-house project management, legal protection, benchmarking, and ongoing testing to ensure that application development specifications were adhered to.

Meta also found that 30% of respondents had not taken any specific steps to ensure their businesses' intellectual property did not fall into the hands of competitors during application development projects.

O'Neill urged users to look at their internal software development processes before outsourcing offshore. "Cost should not be a motivator for outsourcing. Offshore development gives increased flexibility and external resources and skills," he said.

Offshoring best practice

  • Document, deploy, and test a security policy that will reduce risk of infection or hostile intrusion to an affordable minimum level of risk
  • Acquire or develop a method for lifecycle management of an outsourcing relationship
  • Change the IT department's software development process from a "craft skill" to an industrial process.

Source: Meta Group



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