Many companies are looking to outsource development and maintenance of their application software. Common reasons that companies outsource application software are to reduce their costs, improve quality, obtain flexible staffing levels, and obtain improved service and support so they can focus on their core competence such as, designing clothes, managing equity portfolios, or running hospitals. Choosing whether to outsource or not is a strategic decision for a company. Once a company has decided to outsource, however, it must still choose an outsourcing approach that best fits it needs. This paper will describe the many different options for application software outsourcing, including the advantages and disadvantages of each alternative.
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flexibility than before. On-site IT Outsourcing : This approach is a slight variation to the on-site application support approach. In this approach, the entire infrastructure is also given or sold to the outsourcer. Some work may be moved to other locations where the outsourcer can provide the same level of service, but utilizes shared resources or on-demand services. One of the key elements to this approach is service level agreements (SLAs), which are negotiated and included in the contract agreement.