Outsourcing of software development: changes for management

Abstract

The development of software applications for various functional areas has increased dramatically over the past 20 years as a result of both the rapid development of Information Technology (IT) and the demands of growing business. A large number of new Information Systems (IS) implemented in finance area are standard from-the-shelf applications made by large IT companies and adjusted or customized according to local business needs. In most cases such activities as investigation of business area and local functional requirements; standard IS selection, customization and further implementation is organised in the form of Project with its budget, schedule and resources. Adjustment and customization of Information Systems usually is done mainly by professional outsourcers as software developers. This article investigates the problem of successful management of a large Project implemented by involving not only own software developers resources, but also external outsourcers. The case demonstrates that by involving software outsourcers, the management of companies not only gets more opportunities for a successful launch of the Project, but also the challenge to cope with many underwater rocks while governing this development process.

Purpose – The aim of this article is to investigate large Projects from the managerial point of view paying strong attention to the aspect of supporting high development quality with stable non-increasing investments into the Project. The ultimate goal is to clarify possible directions for strengthening of th eProject management and give some hints for practitioners and Senior Management of companies how to manage large Projects with essential part of software development and avoid unacceptable situations during development process.

Design/methodology/approaches – practical experience in the software development management in banking during twenty years and the literature review.

Findings – This article collects the long-year experience and practical results in the software development governance and management, especially working with external software outsourcers and provides some useful hints for practical Project Managers. The author identifies the most critical stages of Project and proposes the direction for solving them.

Practical implications – The research could impact behaviour of the Project Managers leading the large Projects to pay more attention to particular stages of software development. As a result more Projects could be finished and launched successfully in time and with higher quality. In this case company could get better economic results related to its’ financial investments and expenses in the IT part and, as a result, to be more effective in the market. The author believes the conclusions of investigation could supply also social benefits like better understanding between local and outsourced software developers.

Value – This paper provides value for practitioners dealing with the large Projects for the new software implemen