Outsourced Product Development (OPD) is a means of harnessing resources, skills and expertise of an offshore product development firm for the development and maintenance of a product.

Outsourced Product Development Vs. Software Applications Development

Outsourcing product development is conceptually akin to software applications development; however, there are striking differences.

Product Development is precisely “generic” in nature, and meets the requirements of host of users, where each user can use a “well-engineered” product as per his/her requirement. For this reason, a product should have customizability, scalability and must have solid framework to integrate new features. In generic application development, unlike product development, just the functional requirements are met.

Building a “Well-engineered” product requires higher level of skills than just developing an application. In offshore product development, an OPD services provider takes responsibility of all aspects of the product lifecycle, right from R&D, prototyping, development, testing, maintenance, to support and development of next generation products.

In outsourced product development, customers scrutinize the code base of the product to see how it meets the attributes of scalability, robustness, customizability and architecture adherence. Whereas in application development, customers just get satisfied with working of UIs of the applications.

For the successful launch of product development, good documentation, proper configuration management, strict adherence to design, architecture and coding standards are critically important. Whereas in application development, these are just important factors, not compulsory.

Why to Outsourced Product Development?
Increasing cost pressures, changing market dynamics and the need to shorten the time-to-market cycle are some factors forcing many product companies to go for outsourcing their product development.

To succeed in a fiercely competitive software market, product companies have to have frequent release of new versions of their products. Moreover, the success of a product is challenged due to following factors:

	Shorter product life cycles
	Technological obsolescence
	Advancement in design and engineering technologies, and
	Design and engineering complexity

In addition, product development requires exhaustive activity. If the company gets itself involved in minutest details of product development, then, undoubtedly, market analysis followed by astute marketing activities on which success of a product hugely depends, will not get the required attention and priority. And, this will eventually affect adversely the bottom line of the product company. Therefore to have a bigger market share and faster release of new versions of a product, ISVs need to look for outsourced product development services providers for product development.


How To Begin Outsourcing Product Development?

Product lifecycle, typically, involves:

	Product Development
	Product Re-engineering and Migration
	Product Maintenance & Support
	Product Implementation, and
	Product QA & Testing

Product companies can begin with outsourcing just one or two out of all the listed activities. Once the OPD service provider shows its capabilities, OPD relationship is expanded further.

When Does It Make Sense To Outsource Product Development? Outsourcing product development makes the most sense when

	There is a need for expertise the company doesn’t have or need full time involvement.
	There is a need for resources the company currently does not have to complete all of the required work.
	It incurs heavily to keep up internal teams to do some or all of the development projects.

Who Needs Outsourced Product Development?

Start-ups
They are the keenest ones to go for outsourced product development. Cost savings and faster time to market are big enough reasons.

Medium-sized Companies
They neither have the nimbleness of the start-ups nor the strength of the large established players. Bulk of the outsourced product development work comes from these.

Large Product Companies
Of late, large companies have adopted the model. And because of key considerations such as IP security and quality deliverables, they prefer captive units to third-party companies.