Globalization took down many barriers in the manufacturing and services industry. Now you could easily get a product online from anywhere in the world and have it shipped to your house. Companies have understood that outsourced product development brings a lot of benefits, such as quicker results and minimum costs.
In this article, we will tell you 5 reasons to outsource product development.
What is outsourced product development?
Outsourced product development means a business or startup contacts a specialized company for the development or maintenance of products, software or services. There are several industries that can require this service in any country of the world.
What can be outsourced?
You can outsource many services. Human talent is one of them. If your company needs a lawyer to close a business in Australia, you don’t need to hire this professional to be at your company all the time. Instead, you could hire a law firm that can provide you with the service you need in that country.
Another popular service that is commonly outsourced is IT. You can get engineers from anywhere in the world to support your networks and software. Also, to deliver customer service in the IT department.
If you have a product to enter a specific market, you could pay a manufacturing company to be in charge of the mass production. They will deliver the final product to you and you will take care of the logistics and sales.
Product development is another service that can be outsourced. If you don’t have the resources or the team to develop a new device for the market. You can get help with third parties to develop your business idea.
Software development is another service many companies are outsourcing, since they have specialized engineers to build any platform.
It is important to distinguish between software product development and outsourced projects. The first is the design and creation of a platform that allows to measure, process or gather information of a specific device or to complete a task. And outsourced projects refer to an entire process. That is, developing a product from the concept to its final production. This may require the programming of a software or app to connect with the product.
1. Lower costs
Many companies used to manufacture their own products in the past. It used to be seen as a competitiveness factor. However, today it is better to differentiate with other aspects like service, marketing and price.
Companies understood that smaller teams are more efficient than big teams for developing a new product.
The smaller teams that can be hired from other companies represent lower costs. Since the organization that needs to develop a new product doesn’t need to buy expensive machines or big facilities to store them.
Also, there is another cost that needs to be considered. We mean the workload that your employees would have if they had to develop a new product, and at the same time, they need to fulfill their daily activities.
As a result, you would have stressed employees that probably won’t be efficient in what they normally do. That’s why a good outsourced product development process should have an established collaboration and communication plan between the company and the third party.
2. Offshoring production benefits
Offshoring is the possibility to hire manufacturing or services in another country. Let’s say your company is in the United States, but a company in China manufactures your products.
This saves a lot of money for companies since it is cheaper to produce in countries where the labor is not expensive. And they have the specialized machines for mass production.
The outsourced product development trends are to produce massively in industrialized countries, because the final product will have a low production cost. Therefore, the price will be competitive in the market in comparison to other similar products.
It is worth mentioning that outsourcing and getting a good offshoring partner product development is not as easy as you think. You have to investigate deeply the company you want to hire to avoid giving your product development process to inexperienced or unprofessional teams.
3. Reduced development time
Some people may think that outsourcing hinders the development of new products. That’s not true. When you get the services of a third party that specializes in developing products, you get fast teams that deliver outstanding results, because they are focused only on your project.
They create new products all the time, and this experience adds up to be faster and more efficient any time a new process is carried out. Therefore, your company will reduce time-to-market, and you will enter the market quickly and with faster returns.
4. Software innovation
Outsourcing a product is not the only service you could get for your company. You can also get software product development outsourcing.
This is a significant benefit since they can also handle the support and future updates. Therefore, you probably won’t need to have an expensive IT area inside your company.
5. High-quality products
There is a saying, “practice makes perfect.” Specialized companies in product development grow because they love to build new technologies for the market.
For example, the experience of DeepSea Developments in bringing concepts to life, our resources and talented engineers make a powerful combination to design and develop high-quality products.
These devices could also be improved when an upgrade is needed. The market’s feedback and your knowledge will allow your outsourced product development team to make incremental improvements.