What Could Go Wrong When Outsourcing Product Development?

Brian Terhune, Stilwell Baker
DesignNews (4/7/2014)

Outsourcing product development can make any OEM nervous. All of us with experience in the field have seen firsthand what happens when outsourcing goes wrong -- higher costs and time-to-market delays reduce sales volume, lower profitability, and shorten product life cycle.

In a perfect world, OEM project managers communicate their general product requirements to the development partner and establish a collaborative relationship with them. Both parties work together to define the exact requirements for the new product, and the development partner demonstrates the capability to execute.

But this 30,000-foot view makes outsourcing product development sound easier than it really is. In the real world, projects stall due to myriad problems such as:

Vague or conflicting product requirements
Design solutions that fail to perform as expected
Processes that don’t include validation and functional testing

Understanding why outsourcing problems arise -- and knowing how to prevent them -- takes experience. Product development issues manifest in many ways, and a few of the more common examples include: system interfaces aren’t well defined; firmware features are improperly implemented; and components or subsystems don’t meet required performance. Any of these can result in additional development cost or increased time to market.

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