Offshore Product Development

by Sanjay Mishra

We do all our development in USA. However we do work with clients from all over the world, and with US clients' offshore development centers. Sometimes other clients ask us about whether it makes sense to do development offshore. Here is what we tell them.

Is your project complex?

If your project is routine and the knowledge to do it is widely known, there is a better chance of getting it done offshore. There is a shortage of top talent worldwide. The shortage is more acute in offshore locations. You will be competing for top talent offshore with established local players as well as brand name US companies like IBM, Motorola and HP. Your likelihood of securing and retaining the services of top talent in face of such competition is limited.

There are offshore service providers who will promise top talent for your project. Treat such offers with a grain of salt. The top talent is almost always with the bigger established service providers. If you are a small company with a small to medium sized project, the big established offshore service providers will be too expensive for you.

The cost of not having top talent for overall design and review can be very large

The cost of not having top talent for overall design can be large. Making the wrong design decisions initially can increase cost and development time many fold and far overshadow any savings with going with cheaper offshore talent. Make sure you have top talent do the overall design or at least review it.

How much interaction do you need with developers?

If your requirements are subject to change, or the product has be refined in association with feedback from customer you will have a harder time of it. There are timezone as well as language and cultural barriers to cross.

Do you need to get the project done really quick?

If you need to execute the project quickly, there is no alternative to having a small, coherent team with whom you can meet or just pick up the phone and talk. Usually this is difficult to do with an offshore development teams. Overall time to execute is longer with an offshore development team than with a local team.

Are you prepared to work through nights to get your project done?

If you are working with offshore developers in a different timezone, you will have to be prepared to work through late evening or early morning hours. Over time this will take a toll on you or your staff.

Is total confidentiality vital?

You have a much better chance of protecting your Intellectual Property if you get your development done in US.. China has a horrific reputation in this respect.

What is the size of the project?

The bigger the size of the project the better offshoring will work for you. The reason is that you will be spending a lot of time setting up relationships and work procedures. If the project is big, this time and expense will get amortized over a bigger cost.

Are you committed for a long time or is this is a one off project?

The longer your commitment to offshore development the better the return you will realize from it since your set up cost will be amortized over many projects

Do you have established relationships offshore?

You have a much better chance of getting the project done if you have established relationships with developers in offshore locations. These do not have to be service providers but can be individual developers committed to providing quality service.

Consider total product development cost

When considering offshore with local development, consider total project cost. Usually clients negelect the following cost elements:

• The costs of setting up the relationship and interacting with the offshore development center
• The cost of redoing features that are not perfect because of miscommunication
• The cost of increased time since offshore development will take longer

No alternative to offshore manufacturing for mass consumer products

If you have a low margin, mass manufactured consumer product you WILL have to go to offshore manufacturing. This will require significant cost and time to set up. Make sure you have budgeted for this.

If you have a high margin consumer or industrial product, you do not need to go offshore for manufacturing. It may turn out cheaper to manufacture your productslocally, especially for limited runs.

Our take

If your project is

• complex or
• needs significant interaction with the customer or
• you need to get the product developed fast

a top notch, small, local company with low overheads will provide better development service. Irrespective of which route you go make sure you have top talent (here or offshore) do your high level design and review work.

The transition to manufacturing requires hand holding and a level of commitment from your development house. Make sure your development house is prepared to support manufacturing. We at fast-product-development.com work with both local and offshore manufacturers to ensure that your product can be efficiently manufactured.