subject: Right Timing And Right Reasons Equals Successful Production Outsourcing [print this page] One of the most basic questions for product outsourcing is when is the right time to go for it? The answer to that is very simple. When the company needs an expertise the company does not currently have, then it is time to outsource. It is also time to consider outsourcing when having internal teams to do specific tasks will prove to be costly, when a fresh approach in product development process is needed and when the company is capable enough to find, assess and hire an outsourcing firm.
The company should only outsource due to the reason of lack of expertise when it does not involve tasks in the core activities of the business. A sudden rise in demand is a good excuse of needing expertise outside the company can offer. The company would just have to be careful in terms of proprietary information protection to avoid any legal impediments in the process.
When human resource is low and employing full time employees would prove to be costly, product outsourcing is the answer. This will relieve the company of the cost of additional hiring, training and salary. The management, in this case, have to understand the capabilities required to meet this need such as project identification, management of outsourcing relationship and the integration of project deliverables into the existing systems.
If the company does not recognize the need for production outsource method, it might hire employees that will only lead to lower inefficiency of the organization as a whole, aside from the imminent cost. The internal team will get pressured and overburdened leading to costly project delays. Remember that only when teams are able to focus on a single project can it produce the best results.
Another valid reason to resort to product development outsourcing is to minimize development cost. The extra expense of disregarding outsourcing will come from employee cost, overhead expenditure, supporting costs and risk costs. The total of these amounts can spell financial breakdown for the business.
With product development outsourcing, the company gains new processes and perspective. They are also able to acquire quality system reviews and gain industry standard practices. All of these on top of reduction of cost and being able to focus on the core activities of the company.
