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.
software to handle the Y2K requirements. Regardless of which approach a company decided to take, almost every company was working on its IT applications and demand for resources grew steadily. During this time and continuing into the 2000s, labor costs for IT resources in the US and Europe spiraled higher at a rapid rate as a direct result of the demand created by Y2K, the dot-com bubble, and the rush to get on the Internet bandwagon. Today, there is a much larger reliance on IT applications, and IT