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Necessity is the mother of invention, said Plato and human history is littered with products, starting with the wheel, that have arisen out of a need. History, at the same time, is also replete with ideas that failed to get off the starting block and some that made it to the product stage only to fizzle out in the market. Software products too have a similar story.
Critical among the many reasons responsible for the failures of such concepts to garner a market presence are:
- Inability to straddle the present and the future market scenarios
- Failure to define the product
- Overlook competing products
- Tying down software applications to a single vendor
- Sacrificing maintainability to hasten time to market
The above activities could belong either to the core or non-core activities of a product company. Outsourcing non-core activities to vendors whose expertise is in those activities has become a standard way of gaining economic advantage the world over. IT product companies are now realizing that software development now lies in the grey area between core and non-core activities. They want to focus more on product management and hence outsourcing some of their non-core activities within software development makes business sense.
A product can be huge and complex; while some parts of its development are easily identifiable as core part of the product there might be other parts which are not core to the product but serve as ad-on features. The IT product company may realize that is spending a lot of time and effort on these non-core software development activities and may want to outsource these activities. There may be still other reasons why the company may want to outsource all of its software development work.
Some of these reasons could be:
- The company needs expertise in a particular area that it doesn't immediately have
- The company need for resources is going to peak for a short period of time and it doesn't make sense to hire full-time employees to fulfill that need
- There is a desire to incorporate standard practices and fresh approach in product development
- Development cost can be reduced by outsourcing core or non-core development activities
It is important to note that OPD is more effective if it is used with the intention of developing long term relationships, and companies looking at OPD for short term cost-cuts may be in for a disappointment.
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