This document discusses outsourced product development. It begins by explaining that outsourcing should be viewed as a form of collaboration, as no single individual can be an expert in all fields. It then provides examples of large companies that have successfully partnered with outsourcers for drug development, software development, and IT solutions. The document emphasizes that how outsourcing is implemented is more important than why. It outlines key questions to consider around objectives, risks, performance measurement, and risk mitigation. Finally, it stresses the importance of proactive planning, goal definition, and communication when managing an outsourced product development process.

1. Demystifying Outsourced
Product Development
Mrinal Singh
mrinalasingh@gmail.com
Skype: mrinalasingh

2. Outsourced Innovation
One single individual can not be an expert of
many fields so collaboration is important and
outsourcing should be considered a subset of
collaboration

3. Introductions
One of the World’s Largest pharmaceutical
corporation
Leading drug development services
The world's #1 software company
A fast growing IT Solutions Company

4.  Eli Lilly has partnered with Covance for new Molecule
discovery
 Mindtree has undertaken development work for
Microsoft Azure Services Platform

5. Independent Software Vendors spend 18-20% of their
revenues on R&D
 Some corporations have undertaken 100% of the
development through other providers but up to 25% of
the development process can be easily outsourced.

6. : Agenda
1) Share thoughts on potential roadmap for outsourced product
development services
2) Recommend an Approach to outsourcing innovation efforts
based on what has been learned from experience
3) Offer Contact with someone who loves to theorize, experiment,
discuss, debate, pontificate and mutually grow through
exchanging knowledge

7.  Share
 Approach plans
 Experience
 Opportunity to connect with thought leaders in this field

8. Demystifying Outsourced Product Development
Outsourcing Product Development:
Why?
“The best companies outsource to win, not to shrink.”
~Thomas Friedman, The World Is Flat

9. Demystifying Outsourced Product Development
Four potential reasons to consider outsourcing:
1) Access to Technology and other Capabilities
2) Speed New Product Development cycle times
3) Minimize Business Risk
4) Internal Resource Alignment

10. Demystifying Outsourced Product Development
It's not the “why” but “how” that is important

11. Demystifying Outsourced Product Development
Data is of no use until it informs. Information is of no use until
it makes you decisive. Decisions are of no use if they don't give
results

12. Demystifying Outsourced Product Development
Key Questions
 What
 Are the desired objectives from outsourcing?
 Core competencies are needed?
 Is the scope of the service that is being outsourced?
 Is the expected outcome, has it been defined?
 Are the risks
 How is performance to be measured?
 How will the risk be mitigated?

13. Demystifying Outsourced Product Development
Brasstacks
 Executive Sponsorship
 Partner Selection Process
 Partner Management Process
 Project Initiation
 Defining Development Teams
 Development Metrics

14. Demystifying Outsourced Product Development
Selecting an outsource partner
What outsourcing model will be followed?
 Turnkey
 Resource Augmentation Based
 Built Own Transfer
 Joint Development
 Other

15. Selecting an outsource partner (Contd)
 Acumen
Technical
Customer/consumer
Business
People
 Reputation (Ethical considerations, working
style/culture)

16. Selecting an outsource partner (Contd)
Sources to Consider:
∞ Outsourcing experience & proven customer satisfaction
∞ Formalized best practice processes
∞ Adequate numbers of appropriately skilled resources
∞ Relevant Domain / Technology Experience
∞ Financial viability
∞ Flexibility to adopt to your culture, processes
∞ The appropriate motivation to enhance your business

17. The U.S. Federal Aviation Administration spent $2.6 billion trying to
upgrade its air-traffic-control system, only to cancel the project in 1994.
Gridlocked skies are still with us today.

18. Demystifying Outsourced Product Development
Outsourcing Product Development:
When to involve external resources
in the process?

19. Factors Affecting When to Involve External Resources
 Resource Requirements of the project
 Degree of Willingness to Share Confidential Information
 Cost
NDA’s and other contractual arrangements can mitigate both
information-sharing risk and cost risk.

20. New Product Development (NPD) Cycle

21. Practice
How to manage the Outsourcing in the NPD
process?

22. How to manage the NPD process
 Define:
Goals
Objectives
Deliverables
Communication process
 Identify project stakeholders from both the sides
 Undertake Knowledge transfer
 Resource planning, organizing and tracking

23. Important!
•Don’t underestimate the internal resource requirements
Project management
Knowledge transfer

24. Demystifying Outsourced Product Development
Summary and Takeaway

25. Demystifying Outsourced Product Development
Undertaking outsource product development if not planned and
executed in the right manner is fraught with uncertainties at the
minimum and risk of failure, the steps outlined earlier are not an
option but a necessity. To summarize
 Be Proactive: Do not wait for disaster to happen, plan thoroughly.
It is important to not only understand your providers culture and
processes but also to align both the corporations processes.
 Identify the Goal: What is the objective of the outsourcing
exercise, are you undertaking it to reduce cost, increase
technology bandwidth, address resourcing constraints etc.
 Define communication process: Frequent communication is
important especially at the initiating point of an engagement ,
conventional software development process like Waterfall are not
well suited for product development, newer methodologies like
Agile have higher success rates, work with a provider that has
executed projects leveraging this methodology

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27. “It is not the answer that enlightens, but the question.”
~Eugene Ionesco