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Outsourcing is primarily refers to the transfer of business functions or components of business processes to an external contractor. Outsourcing means a performing of specific tasks, business functions/processes by external organization that generally fall out of company’s core competency, but, however, are crucial for regular functioning of business. In IT domain, Software development outsourcing is the outsourcing of software development to contractors outside the client company’s parent country.

Types of Software Development Outsourcing

In-house software development

A large number of organizations have their own dedicated IT departments meeting their software needs. These organizations develop the required software and information systems within their own capacity and productivity limits.

Product Component Outsourcing

In product component outsourcing, the developer is contracted to develop one or various parts of a software system. In case of complex systems when the organization does not have the capacity or required skill to develop a specific component that component is outsourced.

Software Development Order

In this type of outsourcing model, an organization outsources each and every activity related to the software, which includes design, development, programming, testing and maintenance. The main benefit of this type of outsourcing is to focus on the organization's core activities.

Global Software Outsourcing

Global Software Outsourcing, also known as Offshore Software Outsourcing refers to the outsourcing of software development to contractors outside the client company’s home country. The first cases were as back as 1970s and 1980s. However, it was during the 1990s that GSO really took off.

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