Offshore Software Product Outsourcing - The Why, Who and How
Tags : ISV’s, Challenges, Offshore Product Development, SPO, Partner with OPD, Outsourcing advantages
Challenges faced by ISVs today (Why?)
In the face of rapidly changing business environment, Independent Software Vendors (ISVs) face some unique challenges. To achieve product leadership, they need to launch products that provide the best solution at a competitive price. To target today’s global market they need to address specific technical and skills gaps. It is not always viable for them to ramp up in-house teams to address this, due to business, financial or geographical restrictions.
Some of the pressures faced by ISVs today in light of increasing global competition are:
- Improve product quality
- Reduce product cost
- Respond to changing customer needs
- React to shortened product lifecycles
- Improve product innovation
- Improve product retirement processes
- Create by-products and up-sell products
- Reduce time to market to gain competitive advantage
- Competitive pricing
- Launch high performance and feature rich products
In short, ISVs need to deliver products and services that are faster, better and cheaper. As a result, ISVs are looking for ways to accelerate product development, cut down product development costs and increase focus on core activities.
Outsourcing product development has gained significant traction over the years and in light of the advantages offered, ISVs are more open to outsourcing product development to an off-shore technology partner.
SPO Vs Outsourcing Companies (Who?)
There is a world of difference between SPO and normal Outsourcing. An ideal SPO partner should be able to help ISVs realize their rapid go-to-market strategy, ensuring high product quality standards and simultaneously reducing engagement risks by providing:
Agility - Reducing time-to-market and ensuring first-mover advantage.
Quality - Mature processes coupled with reusable and robust frameworks and toolsets ensures quality and at the same time keeps a low total cost of ownership.
Reliability - Mitigate engagement risks and ensure consistent and reliable delivery of services
.Equally important are the necessary product development attributes for market-competitive software such as:
- Maintainability
- Performance
- Scalability
- Extensibility
- Configurability
- Globalization
Prepare to Outsource (How?)
Figuring out the Product Outsourcing Strategy for an ISV could be a tricky affair. This is because, in most cases, there is no going back without incurring significant costs and triggering second guesses about the merits of the initial decision to outsource.
A good product outsourcing strategy answers the following questions:
Is Product Outsourcing Right for me?
- Identify your key business objectives
- Identify, select, prioritize IT functions
- Determine what skills to keep in-house and what to outsource.
- List your strengths, weaknesses, opportunities and threats and how outsourcing can help you.
What Change Control and Management Practices are in place?
- Outsourcing product development processes requires the same or more change. Thus, formal and effective business processes that address change control are paramount.
- Change management focus from Managing Products to Managing Results.
- Processes in place for managing performance. This can be achieved by keeping constant track of the following:
- Quality
- Timeliness
- Finances
- Productivity
How to engage an SPO Partner?
- Plan product development and communications.
- Decide how to manage the process.
- Evaluate outsourcing companies to identify the best one to meet your needs.
- Create a confidentiality agreement so you can enter into candid, full-disclosure discussions.
Building world class products is a lofty goal, though very much achievable if you work with the right platform companies and development partners. The answers to Why, Who and How you will have to unravel before you venture into a partnership with a SPO company. The right SPO company will not just have the right answers, but also the right people and processes to deliver.
Feel free to drop me an email with your enquiries or comments.
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