Frequently Asked Questions (FAQ)
Q.1. What is outsourced product development?
Outsourced product development is the contracting out of the development process to an outside agency. If this agency happens to be in another country then it is called offshore product development.
Q.2. What is off-shore product development?
When outsourced product development is carried out in another country then it is called off-shore product development.
Q.3. How is product development different from customized software development?
Customized software development is usually taken up as a project for a specific department or for a particular company. Thus its users are limited to the organization. Whereas in case of product development, there can be hundreds if not thousands of users. This leads to a requirement for robustness, user friendliness, usability, good documentation which are unique to product development etc.
Q.4. What are the problems/challenges faced by an organization in product development?
Some of the problems faced by organizations include
- Their software was developed earlier on a different technology/platform. Due to changes in technology and new requirements from their clients, they feel a need to upgrade/migrate their products in order to ensure that they do not lose market share to competitors.
- While they are familiar with the technology in which they originally developed the product, they do not have the expertise on the latest technologies or confidence in architecting the new version on their own. They feel they need expert opinion to optimize their investment in the new technology.
- The number of skilled technical people required to carry out these types of projects are not readily available in their markets. Even if they are available, they are very expensive.
- The original developers have left the company.
- The software is not well-documented or the documentation is out of date.
- They face a problem in giving on-going technical support to their clients at an affordable cost and within a reasonable time.
- They face issues of copy protection and security.
- One of our clients had the problem that their software was developed and hosted by the same company, which led to them having unreasonable control on the client's business. So they want to move to a business model of having a separate team for development and a separate team for hosting.
Q.5. What are some of the business opportunities driving offshore product development?
Business opportunities driving offshore product development include
- Software product companies and other product development organizations wanting to take advantage of alternative deployment scenarios for eg. : Software as a Service (SaaS), since it enables them to have a better business/revenue model for eg. : in case of SaaS deployment they can bring down the cost, standardize deployment and hence technical support for multiple customer implementations, provide alternative pricing relevant to monthly or per user charges, thus adding an annuity-based revenue stream which gives them better visibility and predictability for future revenues.
- Expansion beyond their existing markets - for this they need systems which support multiple languages and multiple currencies. There is increasing interest in entering new and emerging markets such as India.
Q.6. What are the benefits/advantages of outsourced product development?
The following are the benefits of outsourced product development
- Availability of skilled resources
- Reduce Cost
- Reduce Time to Market
- Reduce cost for technical support
- Improve response time for technical support
Q.7. What are the various services provided by outsourced/offshore product development companies?
The following services are provided by Outsourced/Offshore Product Development Companies
- Research and Innovation Services
- New Product Development
- Competitive Analysis
- Software Architecture
- Prototype Development
- Product Migration
- SaaS Enablement
- Usability Analysis
- Software Testing and QA
- Technical Support
- User Training
In addition, certain companies like Anuron Technologies also offer market development and operational support for entering the Indian technology market
Q.8. How should I select my Outsourced/Offshore Product Development partner ? What should I look for?
There are several aspects of the selection process that needs to be looked into. First is the choice of country. The things to keep in mind is the availability of the talent pool in the desired technology, political stability, political system such as democracy, rule of law, measures for protection of Intellectual Property, impartial justice system, comfort with culture.
After you have made a choice regarding the country, you may want to evaluate the various organizations having their offshore development centers in the selected country. Evaluation parameters for selecting the organization include checking if they have a proven track record in product development, experience of senior management in product development, focus on product development services vis-à-vis general outsourcing services, testimonials from clients, international experience, responsiveness, professionalism, quality of response to Request for Proposal - the quality of questions, the demonstration of understanding of your requirements, the completeness of the proposal and details provided etc.
Q.9. What are the various stages in the partner selection process?
Your partner selection process may include the following stages
- Request for Information (RFI).
- Request for Quotation (RFQ).
- Partner Evaluation on Quality, Cost and Time parameters.
- Short-listing of potential partners.
- Seek clarifications and more information from partners.
- Contract negotiation.
- Contract signing.
- Site visit.
Q.10. Is a site visit necessary?
The answer is that a site visit during the contract signing stage is recommended. A visit to the prospective partner's office/development center in the selected offshore location, though not mandatory (especially for low value and comparatively simple projects), is recommended for large and/or complex projects or where the proposed partnership is likely to be long-term and/or strategic in nature.
A site visit helps to set expectations and understand the constraints of the partner and work out how best to handle these jointly. It also exposes you to the conditions in the country and an experience of the culture and ethos of the country and your prospective partner. It adds to your level of comfort in working with a partner remotely on a project.
A site visit helps to avoid surprises in the course of the project. If there are any facilities or infrastructure needed for the project which is not available at the partner's location then you can specify these requirements during the site visit. It is also an occasion to get to know each other and demonstrates your seriousness and commitment to the project. Similarly it may also be a good idea to invite your partner over to your offices so that they get an idea of your operations and get a chance to familiarize themselves with your organizational culture.