In the beginning, software outsourcing was used just to cut cost and concentrate on core business. There was very little room for innovation and change. But in years, software outsourcing has matured and changed a lot. Managing proper relationship between suppliers is instrumental in realizing the benefits of software outsourcing. The new approach taken by many companies is that, offshore outsourcing should be ongoing and integral part of the organization.

Its benefits are higher service levels, reduced time to market, improved operation performance, increased IT staff retention and reduction of risk. There are few points which should be considered for new collaborative approach. This approach changes software outsourcing business from traditional buyer and seller agreement to one of co-operation and a shared vision of what one can achieve together. It also suggests constant improvement with focus on most beneficial parts of business.