Top Reasons to Outsource Your Product Development Team

1. Reduce Employment Expenses

One of the most obvious reasons to hire independent contractors is because it makes financial sense. For each employee you hire, up to 30% of their salary goes to social security and medicare, state unemployment compensation insurance, and worker’s compensation insurance. Not factored into that is the cost of equipment, training, and office space. For every new employee, you have to go through training and adjustment periods. Hiring an experienced product development team not only makes financial sense, it can be a great long-term investment (see points 2 through 7). When it comes to hiring an outside firm, the most fiscally advantageous choice is to outsource your product development team for the project you need done, and then part ways as you focus on supporting the sales of that product after it has hit the market.

2. Meeting Deadlines

Employees that are paid hourly or salaried might work hard, but there are some that aren’t that invested in the company and require a lot of motivation and guidance. Outsourced product development firms are paid when their contract is fulfilled, so they have as much of a vested interest in completing the project on time -or early- as you do. External partners are bound by a contract to perform, not on hours spent on a project, and there’s more than a few reasons this works well. For one, independent contractors have experience managing their own time; they will be able to have more reasonable estimations about product development deadlines. Second, they aren’t bound to work during regular work-hours; many engineers and designers have their own approach to solving problems that may not fit into the standard work-day. So, working on projects without being micro-managed benefits them, and they are used to managing their own time. (Plus, isn’t it nice to not have to over-manage employees?)

3. Scalability

Scale your project to whatever your client needs and improve speed to market. There’s no reason to turn away a prospective client when your staff is slightly smaller than needed. If you choose to contract with an outside development team, you become more flexible as a company, add resources that you can potentially turn to again in the future, and can choose to accept any opportunity that comes your way. Conversely, if you have a slow few months, you don’t end up with a net loss from paying salaries to a large team. Neither are you burdened with terminating any employees or having to train new ones.

4. Diversify Your Team and Get a Competitive Edge

In addition to hiring a product development team to adjust for scale, you are also able to improve your company ’s expertise and upgrade their skills. Experienced engineering firms have partnered with many other companies, and some of their clients are your competitors. Being able to work with these outsourced contractors allows your team to pick up new skills and keep a competitive edge that leads to productivity gains without falling into outdated research and design habits.

5. Keep Your Trade Secrets, Secret

There’s a real concern that our ex-employees will use what they’ve learned from our company as a way to gain employment with a competitor. Fortunately, outsourced product design companies sign a Non-Disclosure Agreement (NDA). Unlike when your employee leaves to work for the competition, the contracted product development team won’t want to burn any bridges; their livelihood depends on referrals and maintaining good standing with long-term, repeat clients. The market can be unreliable and sometimes employees leave for personal reasons. However, a product development company that you partner with over the years has a financial self-interest as well as a legal responsibility to keep your company’s research and design data private. Additionally, you can enjoy the benefit of having them work with you again in the future on a newer iteration of your product, and bringing with them all the knowledge and experience that a new employee or a team wouldn’t already have.

6. Bias and Design Controls

Part of maintaining quality systems management is to keep the R&D process as minimally biased as possible. An experienced product development firm will be able to keep detailed documentation of all steps taken to ensure a safe and effective product and will have an awareness of regulatory requirements (as set by ISO 13485:2016 and the FDA). Especially in the medical sector, clinical studies have to be done and only studies that are done in a human factors engineering lab that is verifiably unaffected by corporate or client bias will be considered acceptable by the FDA. Having a third party contractor implement the design control process and ensure a separate entity is doing the trials can decrease the risk of cognitive and selection biases, saving money and time.

7. Specialization

When a project requires a specialist that you don’t have on your staff, you can hire one to make sure that your team has the best information available. Just like it was stated in point #4, this can only increase the wealth of knowledge and experience of your team. Plus, you can boast that you worked on the design of your product with an ‘expert in the field’.

*Bonus:

A full-service product development firm will simplify and streamline the design process to get you to market faster. It can be unnecessarily complicated to work with several outside contractors. For one, communicating ideas and updates can be a challenge and slow things down. When the most important thing is to be first to market, this isn’t a risk you want to take. However, if all your outsourced product development and design team members are already a collective, you won’t have to synergize and manage a handful of entities. From initial design to market-ready product, Nectar Product Development bring your ideas to life.

2019-02-20T01:45:59+00:00

About the Author:

Bryn Cartwright-Campbell is a writer/researcher with a B.A. in Cultural Anthropology from Cal State University, Long Beach (CSULB). As such, she is a connoisseur of people and collector of experiences. Native to Los Angeles, she spent her younger years traveling abroad teaching, writing, learning, and making music. Her list of hobbies and interests extends into the morrow, but the current iteration of her life revolves around her teaching inmates and probationers G.E.D. in Sacramento, California, freelance writing, collaborating on music projects, and running around with her three huskies. Her motto is, "Life is never boring if you pay attention."

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