Thursday, January 27, 2011

What is "Outsourced Product Development"?

When I have searched on Google about this. I found following information.
Why Outsource Product Development?

With heightened customer demand and ever increasing pressure to cut down product cost and crunch time to market, ISV can remain competitive only by:
  • Reducing Product Life cycle
  • Preventing product from reaching a stage of technology obsolescence
  • Building modular, tightly integrated product to add on functionality 
Moreover, product development also involves analyzing competitors, defining product/technology road maps, planning early releases, testing through different approaches, targeting industry trends, spotting trends in technology usage and acceptance, pricing, marketing and promotion, finding add-on features etc. In the entire value chain of product development, "core product development" execution contributes less than 20% of value but takes away as much as 80% of the management time. This is where profitability of companies still concentrating on developing products in-house takes a hit. 

According to studies, profitability is directly proportional to crashed time-to-market and number of release and indirectly proportional to number of bugs.

Product Profitability = K *(Shortened time)*(Number of releases)/(Number of errors)

By outsourcing product development, companies are able to shorten time-to-market, increase number of releases, decrease bugs. The value K is the value factor which outsourcing service provider further brings to the table.

By outsourcing product development, companies are able to:
  • Obtain additional expertise
  • Put together additional resources
  • Reduce development costs
  • Crash product road maps, and above all
  • Boost bottom lines by focusing on new competencies

Read more about Outsourced Product Development (OPD):

e-Zest Solutions Ltd. is an ISO 9001:2008 certified & SEI CMMi Level 3 software outsourcing company with expertise and focus on outsourced product development/ product engineering solutions and enterprise custom application development.

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