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Outsourcing & Partnerships in Product Development

Due to the emergence of high-tech products, companies are struggling to find design partners that can develop end-to-end products, IoT solutions as well as consistent human-centric designs.

Many players in this space that provide software services outsource and/ or partner with other software companies for more complex products. Manufacturing design service companies that focus on design and manufacturing and have been expanding their business in the new emerging market expertise through acquisitions. A new trend towards companies outsourcing the majority of the non-physical engineering tasks – conceptualization, designing, validation, and automation.

This results in facilities in several different locations, different stages of the production process of a single product, leading to additional logistical difficulties.

With more than 60% of customers say the solutions they buy are more than 25% customized – companies lack expertise in designing to manufacturing complex products.

→ Digital Transformation = Greater Variety and Customization

Both large enterprise and SMBs are turning to outsourcing product engineering services to leverage the advantages of latest technologies and stay ahead of the competition.

Finding the right partner to help your company develop an IoT strategy is considered to be more important than the immediate functionality of the IoT platform.

Business partnerships are strategic to the IoT design and engineering process. Over 90 percent of respondents work with one or more partners to develop and manufacture their IoT solutions. Approximately 89 percent work with a design firm on the user interface and/or the device design. Fifty percent of companies responding to the survey consulted with an engineering firm on the industrial design of their IoT product.

This research indicates that companies are placing a strong emphasis on creating deep, strategic IoT partnerships. For example, the vast majority of companies engage with one or more partners to fulfill IoT requirements.

Global Engineering Services Outsourcing Market

Key Trend:  Collaboration Co-Innovative Partnership with Outsourcing Firms.

Global Engineering Services Outsourcing Market

The global engineering services outsourcing (ESO) market stood at USD 317.2 billion in 2020. The industry growth is expected to be driven by the rising level of technical complexity for product development and manufacturing across sectors, cost reduction, shorter product lifecycles, and the growing number of linkages between OEMs and Engineering Service Providers (ESPs).

Bottom Line

New product development is a crucial part of most industries and companies to stay competitive. The product development process requires strategizing, resources, expertise, and time that some companies may not have or choose not to employ in-house. Outsourcing new product development has a wide range of benefits, including faster time to market, lower costs, improved innovation, and increased breadth of expertise and experience.

Joe Toro Industrial Design Process

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