To thrive in highly competitive environments, many organisations look to develop or customise software applications in innovative ways that will let them pull ahead from their rivals. For example, a clothing retailer may wish to develop software that allows customers to experiment with different colours and designs on its web site prior to purchase, or a transport company might be looking to offer advanced travel planning and entertainment services.

While some organisations choose to do this software development or modification in-house, others outsource the task, citing the desire to speed up development and to reduce costs as the primary drivers for doing so, followed by the need to augment limited internal resources through access to the specialised staff available from outsourcers.

As research recently conducted by Quocirca, Winning outsourcing strategies, sponsored by Ounce Labs, shows, many organisations are intending to step up the amount of outsourcing of application development and delivery. The research was based on a survey of 200 of the largest organisations in the UK and the US that outsource significant amounts of their needs in this area.

Outsourcing has many advantages, not least of which is the ability to streamline costs. But, with any outsourced project, an organisation must place its faith in the hands of its chosen partner and must trust that secure coding best practices are followed and that applications have been developed with adequate levels of security built into them.

The research looked to ascertain what processes organisations have in place to ensure their outsourcing projects are a success. However, as the results show, only those outsourcing a significant proportion of their software development needs—namely, three-quarters or more—are doing a good job. Those with less experience of outsourcing lack process, leading to inefficient outsourcing.

This can be seen in the fact that those with the least experience—those in the financial and transport sectors—exhibit daunting levels of failure. For example, around 50% of respondents from those industries have had projects called off completely and 30% of projects undertaken by finance firms have led to legal action being taken against the outsourcing provider.

By delving further into the figures, the reasons for failure become clearer—those organisations that have experienced project failure are not taking the time to build their requirements in at the contract stage. For example, one of the best practices that can be gleaned from those organisations with the most experience of outsourcing is that remediation processes for serious vulnerabilities found in software code must be stipulated in the contract. Overall, this was considered a key requirement for 74% of those outsourcing more than three-quarters of their software development. However, among those organisations that have had to take legal action as a result of project failure, that percentage falls to just 34%. The importance of getting the contract right cannot be stressed enough.

Quocirca will be discussing the results of this research and offering insight into best practices used by organisations to ensure that outsourcing projects are a success in a webinar to be held at 8am PST/11am EST/4pm GMT/5pm CET 20th January 2009. Readers can follow this link to register for the webinar: Click here to register.