Gartner has lately warned ISVs that utilize outsourced software development from being focused on costs exclusively. According to their predictions, business disruption in about 30% of outsourcing deals will be observed through 2012 due to an excessive cost reduction focus. Moreover, based on the data from the recent study, Gartner has concluded that more than 50% of global companies fail to strategically manage their outsourced software development and other sourcing activities and don’t invest enough in critical multisourcing competence.

Gartner highlighted three key challenges in multisourcing that organizations may face:

  • Difficulties in building and managing deals
    There are several reasons why deals in outsourced software development may be difficult to manage. The major difficulties are connected with the lack of experience in controlling and estimating the end-to-end effort that outsourced software development requires, alternative delivery and acquisition models which increases the complexity of the sourcing environment and the decision-making process, and with the dynamism of the service provider landscape which evokes challenges in find the right provider to build a long-lasting relationship with.
  • Failing to deliver expected outcome
    Very often outsourced software development promises more than it can, actually, give. So end-user dissatisfaction, poorly defined business benefits, leaving aside complex government, is among top challenges in outsourcing relations.
  • Failed development of outsourcing deals
    Finally, innovation can cause a great deal of a headache because often outsourced software development fails to deliver the innovation that had been anticipated in contracts. And outsourcing contracts are not structured for rapid changes in the market or organization. This, however, often happens because companies turning to outsourced software development may fail to set their exact vision of evolution and innovation. But the service provider may also be reluctant to any changes, for they may damage their businesses.