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The biggest problems facing SMEs wanting to use external partners to help them develop their electronic products are often cultural rather than technical
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Outsourcing: Bringing Your Engineering Team With You

The biggest problems facing SMEs wanting to use external partners to help them develop their electronic products are often cultural rather than technical. We have worked with many leaders of companies and R&D groups who urgently want to engage external resource to accelerate their new products into the market. However they are being stymied by strong internal resistance from their own middle management and engineering teams. Sometimes this resistance stems from employees’ understandable fear that this is a step that will ultimately put their own jobs at risk. Usually, however, the step to outsource some product development is essential if the company is to thrive and grow, and this specific concern can be allayed by honest communication. More often though, the concerns are more nebulous and subtle. Some typical concerns:

  • “This will create more work for us not less – by the time we have explained this to them we could have done the job ourselves!”
  • “These people (outsourcing companies) are expensive – this will cost far more than doing it internally”
  • “What we do is really specialised – we can’t just engage some outside company to work on this – they’ll mess it up and we’ll end up having to fix it!”
  • “This is our core business IP and knowhow that we built up over years of effort – and we’re giving it away!”

So the move to outsource product development can arouse surprisingly strong emotions and resistance. Understanding this and designing an outsourcing programme that addresses such concerns directly and openly allows managers to bring the team with them. An outsource programme that is enthusiastically supported by an engaged and committed internal team can deliver outstanding business results. Leaders of successful product development programmes that introduce external partners tend to:

  1. Be really clear on the primary motivations for engaging outside help. Are the drivers to; increase capacity, add capability, reduce cost, accelerate time to market, support longterm change…?
  2. (2) Play it straight – tell the team what’s really going on and ask them what they are really thinking…no hidden agendas
  3. Listen to the feedback, and differentiate between rational, objective issues (such as the need to allocate internal support resource to the outsource project) and visceral emotional objections
  4. Take the rational issues into account and re-run the cost-benefit analysis as necessary
  5. Take the visceral, “tribal” objections seriously, and find trusted champions within the company to work through them with

The irrational objections can sometimes be rooted very deeply, for example, bringing in “outsiders” can threaten the sense of purpose and identity of team members, particularly in small companies where the core team has been together for several years through tough times. Ignoring these objections and pushing outsource developments through by executive dictat is rarely the best policy, but equally, simply deciding “not to go there” may mean that the company can get stuck in the slow lane. Most really successful high-growth electronics product companies do use a mixture of internal and external development resource – with the right approach and the right partner, even quite small companies can get outsourcing right the first time.

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