“Use the right tool for the job” is a good motto for the supply of software. There are several options for the supply of software these days. In house development, software packages, domestic outsourcing, offshore outsourcing and application service providers (ASP) are all potential sources for software applications. All have their place in a strategy of software. But not everyone is equally suited to all tasks. Industry experience shows that in-house development and purchased software packages are the pillars of supply programs. The rest are niche solutions.
The results of my company the last survey, strategic trends in information technology, indicates that 50% of production applications were delivered at home by the development, 46% of parcels acquired, 3% of the internal outsourcing, nearly 1% in ASP, and less than 1% in outsourcing.
These results surprised many people who see them. All the attention lavished on outsourcing and the ASP has given most people the impression that there has been a stampede to the source. The reality is that outsourcing and ASP market will grow, but their contribution to the total software installed base is small.
In-house development and purchased software packages are the main sources of software for good reason. At the top of the list is the commitment. Employees know that their success depends on business success. They know they need to deliver the request to support the company and are emotionally committed to. There is no substitute for this intimate connection between the project’s success and personal success. Even projects that use outside contractors or other benefits of this commitment, if the responsibility for the success of the project remains within the company.
Enterprise knowledge is another element of internal projects. Employees know much about the business. They know that the products and how the company operates. Most importantly, we understand the culture of the company. They understand because they are part of it. This will not only help to do things, but also helps determine what is important and what is not.
Physical proximity is another asset of most internal projects. Developers and users are close enough to each other to have a face to face meetings. And often too informal contact classic coffee bull-session, “for example. This promotes better personal relationships that in turn promote better project results.
Internal projects that have a lot to them. It is not surprising that the software has been delivered that way.
So what is the big argument in favor of outsourcing and PSA during development and in-house packages purchased?
Cost, less financial cost. Quality, time to market, and other arguments are sometimes, but every day, the great argument in favor of outsourcing and PSA is cost.
Cost is a powerful argument, but before any financial benefit that is outsourcing and PSA have to overcome major obstacles. The obstacles they face are exactly contrary to the strengths of internal projects.
Instead of dedicated workers, we have the commitment from the seller to make a profit. It is not an insignificant factor to be sure, but is not the same as an employee’s personal interest in the success of the project.
All knowledge that the company is important for the project, both in fact and cultural needs of the employees being transferred to the seller. The more complex or unusual application, the more difficult it is to transfer all knowledge.
The seller is not part of the culture. The seller is always an outsider, at least to some extent. This makes it difficult for the supplier to learn the subtleties that can make the difference between success and failure. You can even hinder the communication subtle knowledge.
Distance is made face to face meetings between developers and users uncommon in many outsourced projects. Some projects of offshore outsourcing you may not have such meetings. A representative of the outsourcer is meeting with company representatives and relays information to developers, remain on the high seas. Distance also complicates communication as simple phone calls, when team members have to fight with eight, ten or twelve hour time difference.
All these things can be overcome, or at least succeeded, but has problems outside projects that compete directly with internal projects. The consequence of this is that the internal and external projects are not suitable for these types of projects. The most basic is the best project is suitable for development abroad. The most singular, that usually means that the most critical to business success is best suited for domestic development. This can also apply within a large project outsourcing by using the functions and the internal development of the subtle or complex functions.
If there is a trick to the sources of software, is to ignore the publicity and focus on the work at hand. So it’s only a matter of using the right tool for the job.
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