Challenges in execution of outsourcing contracts

ABSTRACT

In today's world, companies try to maximize outsourcing to stay competitive in the market. Companies worldwide acknowledge the fact that to stay ahead in competition; they need to reduce costs, deliver the best quality, use latest high-tech skills, and be reliable and creative. Going a step ahead, customers expect a transformation rather than a transition partner, meaning the service providers are expected to add value to the business while supporting the product and meeting the defined service level agreements. Transformation determines the maturity level of the service provider's organization.

In the software industry, approximately 50-70% of the revenue generation with major players comes from outsourcing deals. In many cases these deals are moved from one organization to another due to mismanagement by the service providers, leading to unsatisfied customers.

This paper provides the insights in to the list of common issues faced during the execution of the outsourcing deals in medium and small sized organizations and the approaches implemented towards resolving the issues.

REFERENCES

• 1: Roger S. Pressman, Software engineering (3rd ed.): a practitioner's approach, McGraw-Hill, Inc., New York, NY, 1992
• 2: Helen Huntley, "Five Reasons Why Offshore Deals Fail", Gartner report dated 31-May-05 ID number: G00127840
• 3: Nagesh M, "Cycle Time Reduction", APSEC-06 13th Asia Pacific Software Engineering Conference, Bangalore, Dec 6-8, 2006
• 4: Tony Davila , Marc Epstein , Robert Shelton, Making innovation work: how to manage it, measure it, and profit from it, Wharton School Publishing, 2005

INDEX TERMS

Primary Classification:
  D. Software
  D.2 SOFTWARE ENGINEERING
      D.2.9 Management
          Subjects: Life cycle

Additional Classification:
  D. Software
  D.2 SOFTWARE ENGINEERING
      D.2.8 Metrics
          Subjects: Software science**
      D.2.9 Management
          Subjects: Productivity

General Terms:
Human Factors, Management

Keywords:
contract, demand supply management, enterprise plan, enterprise project management system, innovation., invoicing challenges, it outsourcing, key process indicators, process optimization, service level agreements