Backsourcing of Software Development -- A Systematic Literature Review

Abstract: Context: Backsourcing is the process of insourcing previously outsourced activities. When companies experience environmental or strategic changes, or challenges with outsourcing, backsourcing can be a viable alternative. While outsourcing and related processes have been extensively studied in software engineering, few studies report experiences with backsourcing. Objectives: We intend to summarize the results of the research literature on the backsourcing of IT, with a focus on software development. By identifying practical relevance experience, we aim to present findings that may help companies considering backsourcing. In addition, we aim to identify gaps in the current research literature and point out areas for future work. Method: Our systematic literature review (SLR) started with a search for empirical studies on the backsourcing of software development. From each study we identified the contexts in which backsourcing occurs, the factors leading to the decision to backsource, the backsourcing process itself, and the outcomes of backsourcing. We employed inductive coding to extract textual data from the papers identified and qualitative cross-case analysis to synthesize the evidence from backsourcing experiences. Results: We identified 17 papers that reported 26 cases of backsourcing, six of which were related to software development. The cases came from a variety of contexts. The most common reasons for backsourcing were improving quality, reducing costs, and regaining control of outsourced activities. The backsourcing process can be described as containing five sub-processes: change management, vendor relationship management, competence building, organizational build-up, and transfer of ownership. Furthermore, ...