Why does outsourcing product development project make sense?

It is expected that contract product development will become a major outsourcing trend in the next 10 years. The basis of this model is that technical talents can be introduced according to different cost expenditure changes, allowing startups to focus on its core expertise and business development. If a company decides to use an outsourcing model to develop a product, it may benefit a lot.

Avoid expensive in-house engineering technologists

As a startup, managing funds efficiently is a major issue. Doing product development in-house means you have to hire, train, and pay highly-skilled people like engineers.

What if you could get professional advice based on your needs?

Outsourcing product development projects allow startups to have a full-fledged talent pool of specialists that the company finance can afford in the pre-deployment phase. It gives startups more flexibility to proceed gradually. When the company develops to different milestones, the introduction and exits of professional and technical talents are determined according to the actual time needs.

Do small-scale production

Select a comprehensive partner for product development and small-scale production. When the time comes for mass production in a few years, the transition will be seamless. A good contract developer will help startups identify scale manufacturers and ensure smooth technological transitions of the manufacturing process.

Maintain control of the intellectual property

When some contracted product development companies cooperate with startups, they will hope to obtain some intellectual property (IP).

When choosing a product development partner, it is important to know who will own the intellectual property. The intellectual property that some other design or engineering firm intends or wants to own may be at the core of the development or more peripheral. Giving everything to customers will gain a lot of trusts that the contracted product development companies would not try to compete with the customers.

If you’ve decided to outsource certain product development projects, how do you decide which processes to outsource and which partners to use?

The Product Development Outsourcing Map

The Product Development Outsourcing Map can help you choose the right resources for your team, a tool that evaluates your options based on both strategic and technical dimensions.

3. High Technical Difficulties Find freelancer through platform

1. Collab with product development partners

2. Collab with product development expert

3. Set up the joint venture with Product Development stakeholders

Internal development team
2. Medium Technical Difficulties Find freelancers through platforms

1. Outsourced development companies

2. Collab with product development partners

3. Collab with product development expert

4. Set up the joint venture with product development stakeholders

1. Internal development team

2. Collab with product development partners

3. Collab with product development expert

4. Set up the joint venture with Product Development stakeholders

5. Remote development service

1. Low technical difficulty /

1. Outsourced development companies

2. Collab with product development partners

3. Set up the joint venture with product development stakeholders

Remote development service
  1 – Low strategic importance  2 – Medium strategic importance  3 – High strategic importance 

 

Regarding strategic importance, here’s are three questions to consider:

Is this product development a key company strategy?

Will the product development project become highly relevant to the company’s subsequent development?

Is the product development project an important part of product differentiation?

Regarding technical difficulty, here’s are three questions to consider:

Is it technically complex and does it use cutting-edge components?

Does it rely on internal patents or deep company know-how?

Do you want to capture IP for future use?

While it’s impossible to reduce this complex decision to a set of black-and-white rules, the outsourcing maps will help you make a quicker decision.

At the same time, you should also consider factors such as internal culture, intellectual property sensitivity, cost, and prior experience.

If you’re new to outsourcing or remote development, there are a number of issues that affect the quality of resources you consider, including communication issues and resource turnover issues, and an outsourcing map will help minimize these risks.

When you hire a design firm, they will probably charge you a high cost. To achieve a successful product development process, you must move beyond your comfort zone and keep learning, don’t ignore this valuable opportunity to develop new skills and challenge your fears.

Learn More: 

LKKERSCM Turnkey Design

LKKERSCM NPI Project Management 

LKKERSCM Transfer To High Volume Manufacturing

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