There is a significant difference in outsourced software development methodology vs in-house software development.

The outsourced software development involves a key decision – primarily a management decision – Should you manage the project in-house or Should you outsource the complete product development? Both of these approaches to outsourced software development have benefits if you have the right outsourcing partner.

Typically, if the project management and solution architecture is managed in house using internal resources, it involves a very close resource management. Project manager takes the responsibility of managing the software development direction and ensuring efficient use of development resources.

The software development is divided into definable tasks by the internal team, and performance is measured against the individual tasks.

The second approach, where the offshore vendor provides complete software development including software architecture and project management services, involves interaction at the functional level. It some times involves a detailed product specification phase – where a project manager spends significant time with the business and interface with the offshore team.

The vendor as well as the client, in such cases, shares the responsibility and risks of product development. It involves an interaction at the functional level as opposed to technical level.