Offshore Product Development

By: Tom desousa

Offshore product development has caught the imagination of the entire business world. Offshore product development can be used in for various reasons and for various fields. Sometimes, an enterprise opts for offshore product development to manage costs, boost bottom line and save time for core activities. Other times, some strategic purposes such as dispense with some centers located at critical geographical regions have bearing on the option for offshore product development. There are several reasons for offshoring option. But the basic question which comes in everyone's mind is when and where does it make sense.
Here are few points which can answer the question:

  • There is a need for resources the company currently does not have to complete all of the required work.

  • It incurs heavily to keep up internal teams to do some or all of the development projects.


  • There is a desire to incorporate standard practices or fresh approach in the product development processes.

  • The capabilities to find, evaluate, and hire the outsourcing firm.

  • Methods, protocols, and resources for communicating and managing the outsourcing firm.

  • Tools, and plans for gaining, storing, and using knowledge transfer.


One of the most plausible and successful reasons to is to acquire expertise not currently available within the company. This lack of expertise could be because of a specific, or it could be due to sudden rise in demand that exceeds the company's existing capability. In both situations, offshoring product development is an excellent way to plug the need for expertise.
Other very pertinent reason to outsourcing is to minimize costs involved in the development of products. Offshoring seems to be a better and cost-effective measure, if you take into consideration all costs involved in maintaining the necessary capabilities within your company, which include: Employee costs, Overhead expenditure on office, Supporting costs on information systems.
In addition, organizations having internal product development resources that choose to offshore product development projects can have the following benefits of outsourcing:
  • Gaining new perspective & process

  • Acquiring quality system reviews, and

  • Gaining industry standard practices

Most would agree that firms that don't usually offshore product development should periodically do so to know how they could improve the results of their internal development teams.

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