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Muhammad Kamran
Dept. of Computer Engineering
College of EME, NUST
Islamabad, Pakistan
18
International Journal of Computer Applications (0975 – 8887)
Volume 141 – No.3, May 2016
19
International Journal of Computer Applications (0975 – 8887)
Volume 141 – No.3, May 2016
20
International Journal of Computer Applications (0975 – 8887)
Volume 141 – No.3, May 2016
Table 1. Feature comparison of In-house & outsource 5.3 In-House software projects challenges
software projects
addressed by Outsourcing
Features In-house Outsource In-house challenges Outsourcing Solutions
development development
Limited and defined. Supplementary Hidden and unpredictable Expected and predictable
Resources
resources because of expenses expenses
specialty in such
projects. Bundle of unexpected costs Can save thousands as less
have to bear such as maintenance, up gradation and
Technology Limited range of Have more technology
purchasing new hardware for management cost are required.
technology with and tools for the project
specific project,
respect to specific because company has
maintenance, management
projects. specialized in that sort
and up gradation costs[11].
of projects.
Staffing and Training No Project based Hiring and
Cost More cost to hire Less cost because of Training required
domain and availability of experts In case of specialized and Specialized outsourcing
technology experts. and geographical cost complex projects home organizations have already
difference. organization doesn’t have experts available so don’t have
Expertise Narrow Range. Wider range. enough expertise and to do hiring. Hence can quickly
Speed Slow and gradual. Fast and progressive. workers available so have to fly the project towards
Quality Less Quality Quality variation conduct project based hiring completion.
variation. more[20]. and training[22].
Flexibility Rigid & less flexible More flexible because Maintenance overhead Better and World class
because of local of having more Services
control and strict expertise in the current Maintenance of projects is As the outsourcing
environment. project[21]. highly complex task and organization is specialized in
Legal Less legal More legal compliances generally required a lot of that sort of projects so require
compliance compliances because because of geographical times and cost to be done in less time and cost to do
of domestic market variations in laws and house. Again have to hire maintenance.
and local laws. regulations. experts for the maintenance.
Lack of up-to-date up-to-date Technology and
Technology and Tools Tools
5.2 Risk Comparison
Table 2 explains different risks factors associated with both In case of specialized and Best and latest tools and
in-house and outsource software development. complex projects generally technology available are
Table 2. Risk factors comparison of In-house & outsource home organizations don’t available to specialized
software projects have enough technology and outsourced organizations.
Tools available[23].
Risk Factors In-house Outsource Capital Expense No Special Capital Expense
Goodwill Goodwill in hand. Goodwill is at stake
because if the May occur due to purchase Hardware and software is
outsourcing of new hardware and already available to specialized
organization does not software. outsourcing organization.
perform up to mark. Retention and Training No Retention and Training
Change Change is easy to Change is difficult to required required
trace. trace.
Expert workers turnover rate Skilled IT Experts available to
Communication Communication Communication is
is generally high so have to accomplish the projects
control is manageable less manageable due
hire new employees and train because of very less retention
due to local to less control and
them[12]. rate[24].
control. geographical
language differences.
Management Management is Management control 5.4 Limitations of outsourcing
centralized and and efficiency is less When there is huge cultural and lingual difference between
efficient. as compared to in home and outsourcing organizations communication and
house development. working style may vary a lot.
Control More Business Less Business
Process control. Process control. Foreigners cannot become locals so they cannot be treated as
organizational employees can be treated and motivated.
Privacy Privacy of the Privacy of the Motivation factor of workers is often absent in outsourcing
organization is in organization is at unlike in-house software projects where every individual
safe hands. stake. employee works for promotion and reward by giving his best
Security More Security of Less Security of performance.
confidential data. confidential data.
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International Journal of Computer Applications (0975 – 8887)
Volume 141 – No.3, May 2016
[6] H. Rochester, H. Rochester 1995, "Advantages and [20] Fish, Seydel, 2006. "Where IT outsourcing is and where
disadvantages of outsourcing," Professional it is going" A study across functions and department
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Proceedings. Smooth sailing to the Future., IEEE pp.96-103
International, Savannah, GA, pp. 77-82. [21] Saini, Chou, 2003 “Information Technology
[7] G. Krishna, S., Sahay, S., Walsham, 2004 “Managing Outsourcing: Issues and Future Analyses,” pp. 400–407.
cross-cultural issues in Global Software Outsourcing,” [22] Bersin 2004,"Economics of outsourcing, training
Commun. ACM, vol. 47, no. 4, pp. 62–66, 2004. technology and operations".
[8] Shahnam Taheri, August 2013. “Advantages and [23] A.Gonzales, D. Dorwin 2008. Outsourcing, Past, Present
Disadvantages of outsourcing". and Future.
[9] Rob. Aalders, 2002 “IT OUTSOURCING : Making it [24] Harvey, Nash, 2015. “In or out? The Shape of It
work,” Fujitsu Aust. Ltd. Outsourcing in 2015 ,” vol. 1, 2015.
IJCATM : www.ijcaonline.org
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