Test outsourcing has become a mature practice. There are several full-service & niche service providers around the globe. Product development processes have evolved rapidly due to Independent Software Vendors (ISVs) emphasizing higher product and service quality. An increasing number of ISVs are asking for SLAs; for a shorter time to market; and for reductions in product development cost. They are moving away from a traditional waterfall development cycle to a more iterative, agile development cycle. Testing is no longer just a gating phase that precedes product release. In the new approach, testing takes place in parallel from the inception of the design and development process.

In this paper we discuss how test service outsourcing has evolved to keep pace with these changing trends. We also discuss best practices for consumers of testing services (referred hereafter as *customer*) – what software ISVs can do internally to optimize their use of outsourced testing services, given the pros and cons of global sourcing such as: Pros - cost benefits; ~24/5 turnaround on the product development cycle; load balancing of efforts Cons - lack of clear ownership; time zone and context/centralization issues in case of off shoring More specifically we will delve into various practices in test outsourcing that have become the “need of the day” with the evolution of software product development. We will cover areas including a) Outsourced testing in Agile development methodology, b) Outsourced testing in a Service Level Agreement (SLA) model and c) Outsourced testing in a geographically distributed product development team setup. For the purpose of this paper, we largely mean *off shoring* when we talk about outsourcing. However, as needed, we have talked about onsite resources as well, to supplement the offshore team’s tasks.