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Co-sourcing is increasingly the option of choice when product developers design any kind of electronic device. While the traditional choice is to design the product fully in-house or to outsource everything to a contractor designer, co-sourcing provides the benefits of both approaches.
With co-sourcing, a product developer only brings in-house those functions that are core to its business, while outsourcing non-core functions to a contract designer. Additionally, a much stronger collaborative arrangement is established to ensure the contractor is seen more as a partner.
There are at least four core functions that clearly should be inhouse, albeit with input from suppliers. The first three are straightforward:
Marketing: This function includes market research, which drives the product definition. The product developer needs to be intimately in touch with its customer base to ensure its product meets a need.
Operations: Once the product has been launched, there are a range of day-to-day operational functions but from a design perspective there will be an ongoing need for product maintenance. For regulated devices (mining, aerospace medical etc) this will include quality control during both the design and manufacturing stages.
Investor relations: Most companies are constantly looking for funding to support establishment and growth of a product. From a design perspective accurate cost estimation and control is a key input.
A fourth critical function is design and development function (also known as R&D). For this function, the co-sourcing approach creates more options than just in/out.
Any given technology will have a range of technical elements which vary in their uniqueness and relationship with the company’s core value proposition. Where the elements of the technology that is new-to-the-world or very closely aligned with your unique value proposition, it makes sense to keep this in house because its integral to the valuation of the company. Such technology can include a unique sensor, algorithm or other form of “secret sauce” that is hard to replicate.
Where the technology elements are commonplace (such as PCB design, battery management, communications, etc) it makes more sense to outsource it. In most cases, a contract developer will have done the exact same thing, or something very similar, many times before. They will be more efficient and deliver more reliable quality.
Co-sourcing involves working with the outsourcing partner to analyse the range of tasks required to design and develop your project, assigning responsibilities for each task, then putting in place effective collaboration and project management protocols backed up by strong contractual arrangements.
Sometimes the split of responsibilities lies simply with the particular knowledge of the individuals on the developer's side. Usually a technology-based product developer will have at least one person in-house with technical skills. It makes sense for them to take responsibility for tasks that align with their skills.
However, it is important to understand the role of that in-house technical person. Their primary responsibility should be to manage the contractors they outsource technical work to. No single person, or even a small team, can have expert knowledge across the full stack of technical elements required to competently and efficiently design and develop even a moderately complex electronic device.
Genesys, with around 20 engineers and 30+ years of experience, has a good grasp of most topic areas but even we occasionally need to sub-contract specialist skills (around RF antenna design for example). Importantly, we have redundancy across most of the core skills, so that if one person leaves, we can continue to service our clients if someone leaves.
Contrast that to the situation of a start-up or small and medium sized enterprises (SME). If that one technical person leaves, it creates a huge business continuity issue for the business. Spreading task responsibility with a service provider that has redundant capability is an effective mitigation of business continuity risk.
The overall argument for outsourcing commonplace technology is that it allows a company to focus on its core business (see above) while leaving non-core activities to professionals for whom it is their core business.
Despite the sound logic of co-sourcing, small companies, start-ups and university spin-outs often opt for in-sourcing activities, driven by the perception that they will save money up front when cash is scarce. At this stage of development quality considerations are not paramount, as a simple proof-of-concept using single board computers such as Raspberry Pi or Arduino is usually seen sufficient to reach milestones and help raise capital.
The idea that you can save a lot more money throughout the whole product develop journey by investing in a more professional approach up front tends to fall on deaf ears. But what if you can have the best of both worlds? What if you can have an affordable proof-of-concept platform that translates directly into a commercially scalable product?
In the past, the more professional approach translated to high cost, associated with the custom development of high-quality software and hardware. However, since the start of the Internet of Things (IoT) revolution, pressure from a huge variety of cheap IoT solutions has forced bespoke solution developers to innovate and to lower the barrier-to-entry for companies commercialising new technologies.
In the case of Genesys Electronics Design, we have developed a Wireless Sensing Platform that enables rapid proof-of-concept development on the pathway to developing a fully customised, bespoke solution. This platform leverages pre-developed modules that can be snapped together to rapidly deliver proof-of-concept solutions that use exactly the same designs and coding as the final commercial product.
So, the perception that it’s cheaper, faster and easier to go in-house is under challenge. When coupled with the clear benefits of working with an experienced design and development contractor, the business case for outsourcing non-core elements of your technology begins to stack up.
Contact us to find out how the Genesys team could complement your own in-house team to deliver the best results, both commercially and technically.