Why Do Companies Outsource?

Like teenage video game addicts, businesses line up to be the first of the next outsourcing gigs

. Outsourcing is an invention that can turn a business owners idea into reality without the need to disrupt regular core activities, and without the need to risk sacrificing some assets for product development. The concept can almost only do well, and it cuts a lot of costs.

Cost is the primary reason why product development outsourcing was born. Whether its a new musical instrument, or a handheld gadget, to develop a new product can certainly cost less when raw materials or expertise are imported or done abroad.

A company always possesses that drive to innovate or to develop new things to sell. Oftentimes, they cannot do this because of budget issues. Keep in mind that to develop a new product is to establish a new department, to create new logistic systems, to hire and train new people, to focus on a new field, and many more activities that involve spending; all that while running a regular core business that might slow down if attention is divided.

An outsourced product development saves a company all the new troubles associated with developing a new product. It is basically tell-me-what-you-want-ill-do-it business on the 3rd partys part. Companies love it because, who wouldnt want someone who can turn your ideas into reality in such a short lead time?

Outsourced product development was born because the market is ever changing, and the interval between changes is getting shorter each time companies need to catch up to adjust to an always new economic condition. Competition nowadays is heavily impacted by speed, so it would be nice if a company could still take over its core activities while being able to develop a new product.

To outsource product development was the answer to a companys need to multitask. Outsourcing can also mean many things. Companys can order for reverse engineering, plastic molds, PCB layouts, facilities, labor. The threshold to the number of things that can be outsourced is still expanding. Now, the world can expect for an intensified competition among multi-tasking firms.

by: Sean Countryman

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