New research explains why some Danish companies reject the outsourced development

Posted: July 22, 2010 in Market Research

IT Sourcing Europe highlights the major reasons keeping the Danish companies away from IT outsourcing as well as the key in-house software development trends and challenges of 2010.

IT Sourcing Europe , a UK-based research and IT sourcing advisor company, announced today the completion of its Danish Software Development Best Practices Survey 2010. The Survey was conducted in the frames of its All-European IT Sourcing Research and aimed to explore the major reasons keeping the Danish companies away from the outsourced development as well as the current trends, challenges and problem solving strategies related to the in-house software/web development. The Survey was completed by the 225 Danish companies.

The Survey finds that the three major reasons that keep some Danish companies away from the outsourced development are:

  • desire to have 100% managerial control of their software/web development projects and teams;
  • fear of the hidden costs of outsourcing;  
  • satisfaction with their in-house development.  

However, most participants admitted the fact they would consider IT outsourcing, if they needed faster time to market, ran out of domestic resources and had to remove excessive workload from their internal IT teams / departments. The overwhelming majority of respondents claimed they would outsource their software development nearshore and within Denmark if they ever made such a decision.

Among the most frequently cited challenges of the in-house software/web development are:

  • slow time to market,
  • high costs of development, implementation and maintenance; and
  • delays related to software bugs/errors fixing.  

To respond to these and other challenges, the Danish non-outsourcers try to improve their software development methodology, implement distributed development (e.g., in-house IT department + freelancers etc), encourage staff to work overtime etc.  IT Sourcing Europe finds this finding rather alarming, as the non-outsourcing companies clearly do things which may ruin rather than improve their software development project. Encouraging staff to work overtime will eventually result in greater occupational stress and higher staff turnover and, thus, poorer software product quality. In addition, although many Danish non-outsourcing companies claim that they do not outsource to escape creating shared environments, they inevitably create such environments when deciding to implement distributed development.

More thought-provoking findings and recommendations on how to avoid the common mistakes of the in-house software development are inside the Report.

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