Software Outsourcing

1. Welcome
To
Our Presentation
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Our group members are:-
Name ID
Meer Md Maksel BBA110204148
Md Tanvir Hossen BBA110204177
Tania Parvin BBA110204208

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Software Outsourcing

4. Introduction:
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Information technology has become one of the fastest growing, fastest
changing markets in the world. The demand to produce new or
specialized software for specialized markets business, government or
domestic use in ever increasing. For example, telecommunication,
industry, which was founded on electro-mechanical genius, now, places
more than 80% of the value of a switch in its software. In addition, the
demand for new telecommunication service primarily based on software
or supported or customized by software, Is increasing and growing more
vital.

5. Cont……
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Outsourcing is a new term for an old practice and is not limited to the
information technology world; it means contracting out work. We define
software outsourcing as contracting out the development, planning
management, training, maintenance or operation of software service, skills,
products or applications.

6. Cont….
With outsourcing organizations aim to improve qualities of software
product and service speed delivery times, and reduce cost. This is
achieved through improving company focus gaining access to the
needed expertise, sharing risk and cost, and re-using products and
experience. Outsourcing has gone through many iterations and
inventions. Some outsourcing contracts have been partially or fully
reversed, citing an inability to execute strategy, lost transparency &
control, onerous contractual models, a lack of competition, recurring
costs, hidden costs, and so on
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7. Definition:
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 In business, outsourcing is the contracting out of a business process to a third-party
 Software Outsourcing in broad terms is a transfer of some business functions or
components of business processes to an outside contractor. Software Outsourcing
means a performing of specific tasks, business functions or business processes by
outside organizations that usually fall out of the company's core competencies ,
however, but are crucial for the regular functioning of business.
 Outsourcing is the procuring of services or products from an outside supplier or
manufacturer in order to cut costs. Software Outsourcing, is the contracting out of IT
service provision to one or more external organizations

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Issue in software outsourcing:
Outsourcing software application development raises some technical and
managerial issue which is different from the issues associated with pure in
home development. This causes enough concern in some organizations to
prevent them from taking full advantage of the opportunities and
advantage offered by outsourcing.
 Insurance:
The outsourcer should have adequate public liability insurance against loss or
liability through injury or damage.

9. Cont….
 Control:
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This covers control over the software engineering process and control
over the final product. Control over the software development process
is essential to maintaining control over the quality and other desirable
properties of the product. There is danger that by outsourcing a
product, and consequently surrendering some control over its
development, the outsourcer can no longer guarantee properties such
as security quality and confidentiality. Agreement and contract Terms
need to clearly address this issue, but additional assurance may be
required by the outsourcer that target for system properties, such as
safety are met.

10. Cont….
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 Outsourcing vendors Managing and coordinating:
Many risks in software development are associated with the diversity of
the participants and activities within the software life-cycle. The impact
of outsourcing on these risks can be variable. The issues here are :
 To ensure the availability and capacity of the vendor to carry out
the collaborative development acts the critical times in the overall
project plan;
 To plan, dependencies in the project plan;
 To monitor the states of the project, and all the outsourced
components, so the adjustment to the project plan can be made
or, if needed, corrective action can be taken.

11. Cont….
 Trust and Assurance:
Projects may be requiring trusted components; projects may
require a security or a safety related component. If such a
component is outsourcing then the outsourcer may wish to seek
assurance that the component meets its safety or security
requirement. The problem for the outsourcing is to obtain
assurance that the outsourced component meets the required
level of trustworthiness
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12. Cont….
 Flexibility in the Work Environment:
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The teams working on your project need training and preparation,
regardless of whether they're working at your onshore facility or for the
offshore vendor. Many onshore teams have misperceptions about
outsourcing and those concerns must be addressed very early in the
project. You must thoroughly prepare your personnel for the changes that
lie ahead in their work environment and ease their fears.

13. Cont….
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 Analysis Cost-benefit:
Offshore software development can save your company, significant costs,
but probably not right away. Expect that it will take some time to fully
realize the potential cost savings of outsourcing. Also, be aware of the costs
that lie hidden in the evaluation and selection of a vendor, the transfer of
your project overseas, your employees' transition to a new way of working,
potential layoffs of onshore employees, and the time spent managing the
project and communicating with the offshore team.

14. Cont….
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 Intellectual Property Rights:
Make sure that outsourcing doesn't make your business lose its
invaluable proprietary and confidential business information. Insist that
your trade secrets be bound by full confidentiality and shielded from
misuses and abuse.
 Roles and Responsibilities:
Clearly define the roles and responsibilities of the onshore and offshore
teams before the work begins. Both your business and the offshore
vendor must have clear policies and procedures for daily work, and
clear guidelines about how that work will be evaluated.

15. Cont….
 System access and security
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Access to the purchaser systems by the outsourcer needs to be considered in the context of
current New Zealand privacy legislation, which is intended to protect personal information
about identifiable individuals. An outsourcer may only require system access at certain levels
to enable them to perform their service
 Goals:
Goals direct the efforts to specific deliverables. For example, a business, which launch’s its
Internet site may want to provide all of its offerings through the website. However, this
particular phase of the project may have specific goals, such as streamlining the sales
process using Internet technologies and facilitating order placement by the customers. Such
goals help narrow down the thinking of the developers to see the specific solutions in the
global context and fit them into the project at the proper stages. In future the same system
can be expanded and integrated with the other business processes

16. Cont….
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 Software licenses:
Where third party supply software used to provide outsourced services,
the appropriate licenses must be obtained. Any licenses currently held
by the purchaser that relate to services being provided may need to
be extended to cover the activities of the outsourcer.
 Major Features:
Major features help people further redefine the scope of a project and
open lines of communication to enhance understanding between the
client and the vendor. For example, a web project for a retail store may
have several features such as admin module, inventory module,
storefront and backend database

17. Impact Of Software Outsourcing
We can identify at least the following areas which will be influenced
by outsourcing:
 Project planning;
 Ongoing project management;
 Configuration management;
 Verification and Management;
 Risk management;
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18. Cont….
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These key activities have been summarized in The issue which
influence project planning are:
 The need to evaluate, chose and negotiate with potential
outsourcing vendors:
 The need to schedule, monitor and integrate outsource tasks;
 The nature of the outsourcing relationship;
 The need to plan and budget for joint software engineering
activities, for example: joint configuration management,
validation and verification or team risk management.

19. Cont….
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In order for the customer to exercise a level of control over
the development of the outsourced components, then
bonding, monitoring and benchmarking need to be
continually practiced. Bonding in the context of project
management, refers to efforts of:
 Establish the relationship with the outsourcing vendors;
 Defining the communication and control channel;
 Structuring the internal personnel to oversee the outsourcing work;
 Making the ongoing adjustment in the outsourcing relationship;

21. Cont….
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 Monitoring efforts, in the context of ongoing project management are
directed toward verifying the process controls and ensuring standard
practices across the board. In practice this could mean ensuring:
 Complains to standard;
 That verification and validation processes for the outsourcing
component meet the project standard;
 That proper configuration management process is being followed;
 That there is sufficient progress against the overall project plan;

22. Cont….
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From the project management system perspective proper configuration
management allows the current status of the component to be
determined and used to coordinate the project planning and
implementation activities:
 Baseline for items which need to be shared between outsourcing and
outsourcing vendor;
 Proper channel of communication;
 Proper line of authority for change control;
 Change impact and propagation procedures;

23. Cont….
Another area where the outsourcing desertion has an impact is
in the area of verification and validation. In the case of
outsourcing a system component the outsource need and this
could mean taking into account such nonfunctional factors as:
 System performance
 System usability
 System safety or reliability
 System security
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24. Cont….
Outsourcing involves business risk and project management, risk,
some of the business risk includes the following:
 Establishing and maintaining the relationship required for successful
outsourcing can be complex and resource intensive;
 Losing control over key aspects of the system can cause the
outsourcing to become strategically dependent on the
outsourcing vendor.
 Changing requirements and environment which may impact on
the cost, delivery time, and quality of work.
 The risk associated with integrating potentiality diver’s technologies
into a working overall system
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25. Conclusion:
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White collar jobs ranging from call centers to software engineers to
medical technicians are being "outsourced" to India resulting in
comments from the White House and the presidential candidates in the
USA. This "outsourcing" is blurring the lines in the globalization debate as
well. When globalization mainly meant that blue-collar jobs were going
overseas, it was ok with many American professionals who supported
Globalization. Opponents of globalization, on the other hand, argued
that only the bad, dangerous jobs were being sent overseas...setting up
a kind of sweatshop slavery.

26. Cont….
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Outsourcing has been alone new opportunities an challenge. Through
outsourcing organizations aim to focus on core business, improve
qualities of software products and services, speed delivery time, and
reduce costs. This is achieved through improving company focus, gaining
access to the needed expertise and technology, improving process.
Sharing risk and cost, and reusing products and experience.

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Cont….
Outsourcing, however, bring along key technical and management issues
that need to be addressed and resolved. Further work is still needed to
resolve issues such as paradigms, boundaries, specification, design;
interfaces, risk management, measurements, and outsourcing project
management. Organizations need to adapt their process model to
accommodate the outsourcing decision process more complex. It is
important to assess the organizations situated and drivers to outsourcing
and address the issues and risk before taking the decision.

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