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How often do you here a company’s sales team bemoan the fact that there are far more hot new product development opportunities than there are in-house engineering resources to support them.  If you’re like most companies designing electronic products these days, this is a constant refrain.  As modern products continue to integrate more and more diverse technologies, and development cycle times shrink, engineering staffs are stretched to the limit.  Between supporting upgrades on existing products and mastering new technology for the next generation, technical work always seems to expand far beyond the available engineering time.

It’s at this point that companies face the “buy, build, or pass” decision.  Do they redeploy their design staff on the new opportunity, at the expense of current product development, or do they try to identify outside design resources to augment in-house design staff so current product development doesn’t suffer?  Or do they simply take a pass on what might turn out to be a golden market opportunity?

This decision isn’t as tough as it first appears, but let’s look at some of the excuses (as opposed to reasons) companies use to avoid “going outside”.

“It’s too expensive ... we can’t afford it” — This is perhaps the most common initial response companies have when they consider outside design services, particularly if they’ve never used them before.  Engineering is costly, whether in-house or outside.  The more salient question here is whether there’s good payback if outside services are used.  If the ROI is there, the costs can certainly be justified.

“It’s too time consuming to manage outside resources” — There will be some internal engineering time spent working with an outside design service, but much of this will be at the beginning of the project in the definition and requirements phase.  Design service firms that can offer systems engineering support during this phase can help optimize the use of this time, and that goes a long way toward ensuring a smooth development.

“We need to keep this IP in-house” — It’s important for companies to recognize the difference between IP that is key to their product’s value, and IP that isn’t.  For example, my company works with many OEMs in the commercial and residential AV markets.  We provide these companies with the design of high quality audio networking and DSP solutions for their products.  When a loudspeaker company comes to us and wants to add network audio and control connectivity to their line of powered speakers, they’re not looking to become networking experts – that’s not their value proposition.  They need a networking solution that allows their products to interoperate with other manufacturer’s products using the same networking technology.  The networking IP is needed to expand the product’s market applicability, but it’s not critical for the company to have deep knowledge of the IP in-house.

So, if you decide that looking for outside design support makes sense, how do you find a design service provider that’s a good fit for your project and your company?  Before you fire up Google, it’s a good idea to capture some essential information about your project that will help you to properly select from among various providers.

What do you want your provider to do for you?  Although this may seem like an obvious question, it’s important to identify your desired scope of work before you talk to any design service providers.  Do you want the provider to complete the entire project on a turn-key basis, or do you just need a portion of a project done outside.  As you interview and compare different service providers, it’s important that you give them the same information so that you can get an “apples-to-apples” comparison.  Being clear up front about your desired scope of work also helps avoid those, “Oh, by the way, how about this…” moments after the project is quoted and in progress.

What technologies and/or skills will your provider need?  This is an important question to answer before talking to design service providers, because it helps you narrow the range of providers who are capable of meeting your needs.  There are a lot of design service providers out there - from solo practitioners to huge ODMs that fully integrate design and manufacturing.  You’ll want to be sure that the provider you choose can demonstrate experience in the technologies your project will require.  The reality is that no single service provider can be “all things to all people”, so find a provider that will be frank with you about whether or not your project is in their sweet spot.

What kind of engagement model are you looking for?  Companies that work with outside design resources have different expectations about how they want to interact with their chosen provider throughout the project.  Some take a more hands-off approach, while others may want a great deal of interaction.  In our company, for instance, every project has a Program Manager (PM).  The PM is the key customer contact once the project begins, and gives the client a single technical point of contact for all status and project details.  This makes it easy for a client to get any questions answered promptly, and any changes of scope that may happen during the project are handled efficiently between the client and the PM.  Be sure to make your expectations about the level of interaction you expect, and be sure your provider understands this and can support you.

Deciding to use outside design resources, and then finding the right partner, can be decisions that allow your company to develop products and take advantage of market opportunities that wouldn’t be possible if you’re constrained to use only in-house engineering.  Once you’ve found a suitable service provider, you’ll have the flexibility to add extra engineering only when you need it without the risk of increasing your in-house engineering staff.  And you can bring in specific expertise that you may not have internally, and that doesn’t make sense to spend the time on to develop in-house.  What’s not to like?

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