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Impact of Globalization and Outsourcing of Software Development.

Impact of Globalization and Outsourcing of Software Development. Julie Petrusa Nuzhat Jilani Loay Qasem Yuhuai Zhang. What Is Outsourcing?.

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Impact of Globalization and Outsourcing of Software Development.

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  1. Impact of Globalization and Outsourcing of Software Development. Julie Petrusa Nuzhat Jilani Loay Qasem Yuhuai Zhang

  2. What Is Outsourcing? • Outsourcing refers to the process by which companies use external providers or external entities (such as a subcontractors) to manage or maintain certain aspects of their company's business.

  3. Communication In Outsourcing: • E-mail. • Teleconferencing. • Regular site visits by senior outsourcers.

  4. Advantages of Outsourcing Software Development • Reduction in cost • Can save money in intangible areas such as employee benefits. • Money saved can then be reinvested in other areas. • Economic gains and increased competitiveness.

  5. Advantages .... • Improved efficiency • More control, can cancel contract if the quality is not satisfactory. • Eliminates hiring, training of staff, and dealing with problem employees. • More time to concentrate on other areas • Addition of outside expertise • Brings expertise that is not available in current employees. • Productivity may increase

  6. Disadvantages of Outsourcing Software Development • Communication problems • Differences in language and cultural background. • No knowledge of existing technical environment and domain. • Difficulties in managing the outsourcing process • Loss of flexibility and ability to respond quickly to new demands because of locked contracts.

  7. Disadvantages …. • Loss of direct knowledge within a company • Loss of loyal and knowledgeable employees. • Staff morale suffers as positions are reduced or eliminated.

  8. Cost versus Quality • A comprehensive quality program can be economical in the long run. • Customer satisfaction, maintenance, and support all have to be considered. • Emphasis on thorough testing.

  9. Standardization • Capability Maturity Model: Useful to a certain extent. • Consulting companies evaluate and grade contractors according to CMM specifications. • CMM scores can be deceptive.

  10. Important Considerations • Success stories from the source companies • Local technical expertise & project management • Proven track record on software projects similar to the outsourcing firm’s project • Separate contractors for Development and QA

  11. Legal Issues • Legal Issues In Overseas Software Development : • Intellectual Property (IP) protection • Labor and employee rights • Export control restriction • Privacy and data security restriction

  12. Legal Issues • Intellectual Property protection • IP laws vary from country to country • Examples of IP theft • Suggestions: • understand IP laws in both countries • use the combination of laws and good contracts • protect confidential information properly.

  13. Legal Issues • Labor and Employment Rights • Export Control Restrictions -- may not be allowed to outsource overseas -- may need permission first. • Privacy and Data Transfer Restrictions -- violation may lead to lawsuits, fines, or damage business reputation.

  14. Thanks

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