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	August 3, 2006 Offshore Product Development Has Arrived by Sudin Apte with John C. McCarthy, Ronald J. Furstoss

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Executive Summary

Product development — though small in size — is one of the fastest-growing segments of the offshore services market. As companies across a range of verticals, from aerospace to medical instruments, grapple to add more value-added software to their product while cutting their overall research and development (R&D) costs, this offshore segment will expand dramatically. Its unique requirements mean that it will develop separately from traditional outsourced IT work. The overall offshore product development market will consist of three different segments: 1) R&D and embedded, 2) classic engineering, and 3) software. However, taking product development offshore is not a quick fix for firms. The organizational resistance, the hurdles to running a successful captive, and the process investment needed to manage third-party work half a world away dictate that firms plan a three-plus-year migration.

TABLE OF CONTENTS

• Taking Product Development Offshore Gains Momentum
• Product Development Is A Specialized Field Separate From IT Services
• How Users Should Approach Offshore Product Development

RECOMMENDATIONS

• Firms Must Get Their Internal House In Order Before Going Offshore

ALTERNATIVE VIEW

• India May Face Acute Skill Shortage
• Related Research Documents

This is an excerpt