The outsourcing market is rapidly expanding and is no longer limited to non-strategic, transactional functions. Product Development joins the list of company functions identified for outsourcing by an increasing number of companies. A recent survey of business leaders responsible for corporate technology and spending, found that a majority plan to increase outsourcing budgets over the next 12 months, many by a significant percentage.
A number of factors are influencing this increase in corporate outsourcing priorities, including:
Need for Cost Efficiency
Core Business Focus
Risk Reduction / Mitigation
Business Process Enhancement
Optimizing Investment
Reduced On-Roll Headcounts
Reduced Fixed Cost
Increased Variable Costs
Asset Reduction
Access to Global Expertise
Derived Incremental Revenue
Access to Technology
This environment is challenging, highly competitive and ever-changing. As market share wanes, companies explore new markets, introduce innovative products, and apply the latest product development technology/practices. Time to market has become critical. Firms are increasingly challenged to get products to market faster due to shorter product lifecycles, rapid obsolescence due to advances in design technologies, increased product complexity. Difficult/costly organizational infrastructure changes complicate product development.
These challenges and the requirement to introduce innovative new products have caused development costs to escalate. Consequently, companies have recognized that engaging in an engineering outsource engagement can reduce design cycle times, improve time to market and costs, minimize development risks, access the latest technology without owning it, improve return on product development investment, and, in the process, improve overall competitiveness.
