Why Outsource? And Other Burning Questions Answered

Earlier this week we teamed up with Fidus and OCRI to host "Outsourcing Product Development, How to Minimize Risk and Maximize Rewards". I couldn't make it back to Ottawa for the event, but my esteemed colleague Francis took great notes. The roundtable consisted of engineering executives from Alcatel, Teradyne, Liquid Machines, and MXI. All have been directly involved with outsourcing in R&D.

In my next few blog posts I'll report on some of the questions asked by moderator Jim Roche, starting with my favorite:

Why outsource?

• To augment capacity, and deal with peaks and valleys.
• To reduce costs, and blend the cost of outsourced resources with your internal resources
• And the answer I liked best: Tap new ideas, inject new blood and innovation, and challenge your own practices.

The last answer was from one of the companies with the most outsourcing experience. To me, that answer indicates you've reached Outsourcing Nirvana, or the highest level of maturity in outsourcing. You're looking beyond the bottom-line cost savings and asking yourself "How can I use outsourcing to increase my top line? How can I use my partners to create better products?"

Another good answer came from a panel I organized in Waltham, MA: to let us do things we wouldn't otherwise be able to do. In other words, the panelist looked at outsourcing as a way to free his team to do tackle opportunities rather than being reactive.

Coming up: Why not outsource? What is "outsourceable" and what is not?" Stay tuned.