Top 8 Reasons Why Outsourcing Product Development is the Right Choice

In-house vs outsourcing product development — what does it look like?

In-house product development

Traditionally, businesses developed and designed their own products in-house from scratch.

Outsourcing product development

Outsourcing product development means hiring a party outside a company to perform services and develop products that traditionally were performed in-house by the company’s own employees and staff.

  • A feeling of an inability to control and manage the development process
  • Fear of the loss of security and intellectual property ownership
  • Worry that the innate company culture and perspective that gets baked into products will be missed by an external agency.

“ Overall, outsourcing decisions will play a significantly more strategic role in short-term resilience and long term growth.”

1. Multi-disciplinary expertise

Developing a product requires multiple diverse activities such as:

  1. Product management- Deciding what the product features are
  2. Technology leadership — Outlining a technology strategy that grows with the product
  3. UX design- Designing a fantastic user experience
  4. Crafting a technical design
  5. Technology architecture- Security, and interfaces
  6. Development — Developing the product using different languages for front-end cloud, mobile apps and so on
  7. Quality assurance- Testing the product and deploying this to production (DevOps)
  8. Growth marketing- Growing the product and managing sales

2. Instantly onboard a great team

All successful products have great teams. So, your product should have a great team to have a chance of success. But therein lies the challenge.

3. Single-minded focus

In the early days of a new product, in-house teams typically consist of people sourced from other, active projects. Very often these are people who are now multi-tasking. They continue to pay attention to their existing active project and are partially focused on the product.

4. Product — success mindset

A successful product goes through multiple iterations. The original concept or feature set may not be the one that clicks with their users.

5. Speed to market

Once a product idea takes shape, it is critical that you get a version to market as fast as you can.

6. Cost reduction

According to a key finding of the Deloitte Global Outsourcing Survey 2020,

  • A part-time CTO gets you solid technical strategy and leadership without having to pay an arm and a leg and parting with a chunk of stock options.
  • You can tap into multiple technology architects with expertise varying from machine learning to high volume, low latency systems, to choosing technical stacks at the cost of less than one full-time architect.
  • UX designers can come in and help create the experience design for each release without having to be retained as full-time staff.
  • Teams can scale up rapidly and scale down when not required.

7. Free you up to focus on your core business

The core parts of your business include business strategy, allocating funds, marketing, sales, product management and product development.

8. Intellectual property protection and generation

One area of anxiety with outsourcing your product development is the protection of intellectual property. However, with a good product development agency, this fear is unfounded. Good partners have solid agreements that spell out how they manage the client’s intellectual property.

  1. Intellectual property that the client brings in is secured and protected (through operating practices such as VPNs, secure laptops, access control and so on, and contractual agreements with the client and with the employees who have access to the property)
  2. Intellectual property created by the agency within the course of performing services is owned by the client. The agency even helps in filing patents and copyrights.
  3. Any intellectual property brought in by the product development agency is clearly articulated and the client is provided with a royalty-free perpetual license or an option to not use the IP.

Key takeaway

Most businesses assume that cost reduction is the only key benefit of outsourcing product development. Consequently, they end up taking the longer route to success and lose out of the numerous benefits.



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Ignite Solutions

Ignite Solutions

Our thoughts and practices on design, technology, culture. We help startups design and build their technology.