After we asked the panel "why outsource?" we asked them "why not outsource"? The panel was comprised of companies of outsourcing beleivers, people who were actively leveraging outsourcing in R&D, so this question gives us an idea of what experienced managers see as the risks and potential pitfalls:
- It could have an impact on your own team - you have to be careful which parts of the product you outsource. Another panelist noted that this risk can be mitigated if you make it a point to integrate the in-house and outsourced team
- The risk of failure, and the costs of failure. Contrary to what some beleive, it's simply more difficult to manage an outsourced project. It requires at least as much follow up, if not more, than an inhouse project.
- It's difficult to forsee the hidden costs, such as management overhead, or the cost of bringing the product back in-house to be maintained once it has been developed.
The next question, what should you not outsource, spawned a good discussion about what is core and what is not core, which I'll cover in my next post.