Six steps for a successful outsourced product design engagement

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Six Steps for a Successful OPD Engagement
The importance of Outsourcing Product Design (OPD) and the inherent challenges in entering an emerging market continue to be discussed in multiple forums. Given the overwhelming benefits of OPD, engineering managers and business owners have come to firmly believe that outsourcing is the strategy for addressing some key business challenges.
However, not many organizations have taken the next steps to develop the substantial benefits of OPD. Research has made it clear that most organizations have not had successful outsourcing engagements in the past.
This is evident from the article titled “What causes outsourcing failures?” This article details nine principal causes of failure that are common across outsourcing. Upon closer analysis, it is evident that these apply to OPD as well.
With over a decade of experience and expertise in handling product design projects coupled with a robust six-step OPD engagement process, we have demonstrated proven success to our customers.
Our six-step OPD engagement process successfully addresses these nine causes of possible failure as explained below. Though this may sound obvious, but to ensure success, both the outsourcing organization and the OPD partner need to spend substantial quality time and energy during both the pre and post engagement stages.
What to Outsource?
Firstly, the outsourcing company should understand what part of their product design process can be outsourced. To decide this, the company should ideally complete an internal engineering assessment based on the product diversification strategy adopted for the entry into the emerging market.

A well-defined Statement of Work (SoW) or Requirement for Proposal (RFP) can reduce and eliminate many issues that crop up in an outsourcing engagement.
After deciding the project scope, the next step is to create a requirements document involving all the relevant project stakeholders.
Discuss this requirements document in the light of the outsourcing partner’s proposal document. Does it match one-to-one? Does the proposal explain clearly the project scope, key deliverables, schedule, resource skills, training requirements, roles and responsibilities, and cost terms adequately without any ambiguity?
At this juncture, both the companies should be aligned with respect to the project and commercial terms
Due-diligence
This step is critical to eliminate the risk of possible project failure. Take the time to check the following:
 Did you define what the outsourcing company should do?
 Do they have the capabilities outlined in the proposal?
 Do they have the resources and experience as claimed?
This due diligence enables you to check if the scope of engagement needs to be further refined or the decision to continue with the partner needs to be re-visited.
Contracting Phase

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Six steps for a successful outsourced product design engagement

  1. 1. ENGINEERING SERVICES ARTICLESubscribe now to ensure you dont miss our articlesSix Steps for a Successful OPD EngagementThe importance of Outsourcing Product Design (OPD) and the inherent challenges in entering an emerging marketcontinue to be discussed in multiple forums. Given the overwhelming benefits of OPD, engineering managers andbusiness owners have come to firmly believe that outsourcing is the strategy for addressing some key business challenges.However, not many organizations have taken the next steps to develop the substantial benefits of OPD. Research hasmade it clear that most organizations have not had successful outsourcing engagements in the past.This is evident from the article titled “What causesoutsourcing failures?” This article details nine principal causesof failure that are common across outsourcing. Upon closeranalysis, it is evident that these apply to OPD as well.With over a decade of experience and expertise in handlingproduct design projects coupled with a robust six-step OPDengagement process, we have demonstrated proven success toour customers.Our six-step OPD engagement process successfully addressesthese nine causes of possible failure as explained below. Thoughthis may sound obvious, but to ensure success, both theoutsourcing organization and the OPD partner need to spendsubstantialquality time and energy during both the pre and postengagement stages.What to Outsource?Firstly, the outsourcing company should understand what part of their product design process can be outsourced. Todecide this, the company should ideally complete an internal engineering assessment based on the product diversificationstrategy adopted for the entry into the emerging market.
  2. 2. ENGINEERING SERVICES ARTICLEDefining your WorkA well-defined Statement of Work (SoW) or Requirement for Proposal(RFP) can reduce and eliminate many issues that crop up in anoutsourcing engagement.After deciding the project scope, the next step is to create arequirements document involving all the relevant project stakeholders.Discuss this requirements document in the light of the outsourcingpartner’s proposal document. Does it match one-to-one? Does theproposal explain clearly the project scope, key deliverables, schedule,resource skills, training requirements, roles and responsibilities, andcost terms adequately without any ambiguity?At this juncture, both the companies should be aligned with respect to the project and commercial termsDue-diligenceThis step is critical to eliminate the risk of possible project failure. Take the time to check the following: Did you define what the outsourcing company should do? Do they have the capabilities outlined in the proposal? Do they have the resources and experience as claimed?This due diligence enables you to check if the scope of engagement needs to be further refined or the decision to continuewith the partner needs to be re-visited.Contracting PhaseThis phase is for both companies to contractually agree upon other essential obligations such as: Who will own the patent for the product designed by the outsourced partner? How will the outsourced partner protect my (outsourcing company’s) intellectualproperty rights (IPR)? How do I handle product design concepts that are shared or leaked to my competitors? What is the accountability at the partner end if there is a deadline slippage leading to product launch delay?The outcome is a contractual agreement with a list of Service Level Agreements (SLA) with legal bindings includingpenalty clause, force majeure, non-disclosure agreements, patent violation acts. This will enable you to safeguard yourcompany rights.Transition PhaseNow that the ball is rolling, build project team counterparts at both the ends. Involve top management (project sponsors),project leads and a project governance document comprising project execution process, project / knowledge transitionescalation matrix, documentation, configuration management, audit schedule, and contact information.This step ensures the engagement is intact and limits possible communication gaps.
  3. 3. Barry-Wehmiller International Resources8020 Forsyth Blvd., St. Louis, MO 63105  (314) 862-8000info@bwir.com  www.bwir.comENGINEERING SERVICES ARTICLEManaging and ReportingThe final step is the value realization step for the outsourcing company. How rewarding has this engagement for their company? How much value addition has this partner relationship done for me? Can I measure value against reduced product lead time, optimum project costs, repeatability in quality, reducedproject management time? Does the partner have creative product design ideas as against the competition? Typically, the partner will beworking in house to come up with this dataThe writeris an OutsourcingProduct consultant who hashelped companiesdesignproductsfor emergingmarketslike India.You canreach himat vivek.maladkar@bwir.com forfurtherassistance.About Barry-WehmillerInternational ResourcesBarry-WehmillerInternational Resources (BWIR) is a global provider of business and technology solutions to the mid -marketmanufacturing domain.With headquartersin St.Louis,MO.,and global delivery operationsstrategically located to meet customerneedsthroughoutthe U.S.,Europe,SoutheastAsia andSouthAmerica,BWIR offersworld-classengineering services and enterpriseconsulting solutions that enable its clients to achieve a competitive edge in their marketplace.Vivek MaladkarHead Business Development –EuropeBarry-Wehmiller International Resources Pvt. Ltd.101 Lilac Grove | Nottingham, UK NG9 1PF+44 (0) 115 967 8787 | DDI +44 (0) 115 907 9483 | fax +44 (0) 115 967 8707Cell +44(0)7867 505 709vivek.maladkar@bwir.comwww.bwir.com

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