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The Smart Techie was renamed Siliconindia India Edition starting Feb 2012 to continue the nearly two decade track record of excellence of our US edition.

August - 2008 - issue > Outsourced Product Development

Roadmap for Success in Outsourced Product Development

Ravi Thummarukudy
Thursday, August 7, 2008
Ravi Thummarukudy
The economic downturn at the end of 2001 was so swift and dramatic that many companies had to find ways to trim their product development costs in a hurry. While the big companies could move to scale up their lower cost offshore design centers rather quickly, the smaller companies were without that option. Unable to find a quick and economical way to implement their dream projects, many startups were forced to shut down. Many others struggled to open their own centers in India or China but found it difficult to hire and retain qualified product development engineers. Still others signed contracts with limited third party product developers in low-cost geographies only to realize that outsourced product development is easier said than done.

With those lessons learned, this article will detail how companies can now succeed in product development with offshore partners. It’s especially relevant now, as 2008’s economic slowdown has cooled product development activities. Now is the ideal time to explore these options, as well as prepare guidelines for future engagements. In fact, I strongly believe that this is the best option for economically developing products at the moment.

To add some credibility, I’ve been working in product development for the last 18 years, first from an automation standpoint at Cadence and later in outsourced product development as one of the co-founders of GDA Technologies. I’ve worked with many customers and have been associated with several successful projects (along with few failed ones, admittedly). I continue to manage the IP & IC services business at GDA, now a 100 percent owned subsidiary of L&T Infotech, and I still consult with many of our customers on ways to make their outsourced product development successful.

Occasionally, customers discuss their past unhappy experience in product development with offshore companies, almost always noting failures by both parties. Like everything else, there’s a process for successful outsourced product development, and lack of enforcement will lead to expensive mistakes. Bigger companies with established infrastructure and processes succeed because they can identify risk factors early and take corrective actions quickly, while startups can only count on prior individual experiences. Any outsourced development project has several stakeholders, starting with the management of both the product and service companies. But the key stakeholders are the VP and Director of Engineering in a product company and the Technical Lead and Project Manager in a services company; their experience and skills can make or break the engagement.
Over the last 12 years, I’ve worked with numerous product development programs as the outsourced partner and I’ve come to realize that succeeding here is quite different from doing the project internally. The successful projects followed a methodology, and I’d like to share some key aspects leading to successful engagements.

I’ve detailed the stages of engagement and how, at each stage, the successful engagements differed from the failed ones. Of course, this is a summary of general positive actions—an individual program should follow the guidelines best suited to its own success.

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