This is one of the oldest forms of outsourcing. There are still many pitfalls, although the path to success is now well trodden.
Like other forms of outsourcing, it can involve a range of issues. For example: Will existing warranties transfer to the supplier? What about documentation, operation procedures, etc? How will company wide processes, procedures, and so be addressed? Etc.
All these and many others will need to be carefully considered, and steps to address them included in the transition plan, the SLA and the outsourcing contract.
THE EARLY STAGES
When considering application outsourcing, management must be very clear with respect to its expectations. It must clearly define the services themselves – in other words, exactly what it wants to be delivered.
It is always a good idea to measure these against the existing services, almost a bench-marking exercise. At the very least, this will provide useful data for use downstream, when consideration of suppliers is undertaken.
Having defined the requisite service, costs should be considered. Again, it is wise to start close to home. What are the current costs? How are these projected to increase (or decrease)?
Essentially, a picture is being built here of where the organization currently stands, and where it wishes to stand, with respect to the application development. Having established this information, the path to application outsourcing should be far clearer.