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.
an existing application (or both), while the buyer continues to maintain or develop other existing applications. For example, some companies may outsource the customization and support of their ERP solution to either their ERP provider or to a third-party outsourcer, while continuing to maintain all of their other applications. The main advantage is that the buyer can focus on applications built in one technology or domain while the outsourcer focuses on a different technology and domain. New development