Imagine this: you have a brilliant product idea, a solution that could revolutionize your industry. But translating that idea into a tangible, market-ready product feels like climbing Mount Everest – daunting, complex, and potentially dangerous. This is where strategic product engineering services come in, acting as your Sherpa on the innovation journey.

The landscape of innovation is constantly shifting, but one thing remains constant: strong product engineering forms the backbone of successful products.

Through design, development and optimization of a product, product engineering helps you create innovative solutions that meet customer needs and market demands. It’s an approach that spans disciplines, from mechanical engineering to software development to design and market research, and encompasses the product lifecycle from concept to market launch. It translates ideas into products, delivers a competitive advantage and improves customer satisfaction.

Whether you’re a startup looking to launch your first product, a growing company seeking to scale, or an established enterprise aiming to optimize your product engineering strategy, partnering with the right service provider can take your product from concept to reality, but navigating the options can seem daunting.

This guide dives into the key considerations for choosing a product engineering service partner and explores best practices for a successful collaboration. Let’s get into it.

Should you keep Product Engineering in-house?

Product engineering is core to your business operations. That being the case, you may feel it’s important to keep it in-house, to increase control over the development process. There’s definitely an argument to be made for this. Major tech companies like Uber and Airbnb, whose business model is entirely based on the tech product, keep product development in-house.

Does that mean that product development should never be outsourced? Definitely not. The simple fact is that many startups come into being with a great idea, but without a trusted technical person within the origanization or deep pockets. Such businesses cannot afford the cost of setting up an in-house development unit. In any case, they have no experts to oversee the unit. The only way they can move forward is by outsourcing product engineering or product development.

Here, we’re using the terms product engineering and (tech) product development nearly interchangeably.

Today, almost anything can be outsourced effectively. Outsourcing reduces fixed costs and makes it easier to get started. On the other hand, as products get more complex and integral to the business, it also complicates collaboration.

Why should you outsource product engineering?

First of all, because you may not have expertise in-house. You don’t want that to stop you from developing your product and starting your business! Expertise is expensive, and is the main reason to outsource. Developing, equipping and maintaining a full in-house team of tech experts is expensive and difficult. In addition, you have to ensure that you hire and train the right team! Outsourcing gives you access to the best resources from around the world, at the right cost.

Outsourcing reduces upfront and fixed monthly costs. Building and maintaining full capacity in a specialized field can be expensive. More importantly, outsourcing converts fixed costs to variable. This reduces financial risk. There’s also less enterprise risk, as resources can be added or removed without the financial or time impact on permanent employees during rightsizing.

Product development cycle times are reduced as experienced outsourcing teams are ready to hit the ground running. This helps businesses gain the first-mover advantage.

Most importantly, it allows you to focus on your own area of expertise. This way, you get the best results for every part of the product development cycle and your business in general. Outsourcing helps you gain capacity and capabilities.

So should you ever insource?

There are a few cases when keeping product development in-house could be the right choice. Here’s a few reasons why insourcing could be an advantage to you.

1. Control: Your vendor partner makes a lot of decisions about the development process. How many resources should be deployed? How should tasks be prioritized? Failure in product delivery can result in real business losses.

2. Better Communication and Collaboration: When you outsource, your team isn’t based in your office. You’ll need to put in extra effort into communication and collaboration. When you want to brainstorm about a new feature, you need to schedule a call with the vendor. In addition, depending on where your outsource partner is based, language or even time zones may be a barrier.

3. Security: When your mission-critical app is developed in-house, it’s protected by your own firewall and cybersecurity measures. When you outsource, you depend on the security setup of the vendor partner. Besides which, you’re sharing crucial IP with a third party – this does entail a certain amount of risk.

4. Quality and Training: This also largely relates to control. When your team is under your direct command, you have full visibility into the training of each employee and the quality of their output. Course corrections can be made in the flow and more effectively, thus improving output quality.

All this, however, assumes that your team includes at least one core member who is technically sound! You also need deep pockets Without that tech oversight, you’re definitely better off relying on experts who know the subject. With the right technical partner, these drawbacks can easily be mitigated.

The head-to-head comparison

The bottomline

So what’s the verdict? As always, the answer is neither black nor white. Outsourcing your entire product development function, from ideation to execution, probably relinquishes too much control of this key department. Insourcing the entire lifecycle is probably too expensive and too resource-heavy for your startup.

Our recommendation? Keep ideation, innovation and maybe even prototyping in-house, depending on the level of relevant expertise your organization already boasts. Don’t try to build expertise at scale, especially in the early days. Choose a trustworthy partner with a proven record of excellence, and ensure that you’re on the same page from the word go. In the early days of any business, a technically strong and resource-heavy product engineering team is an undue burden.

On the other hand, if you are a technical expert and intend to build the product yourself, great! More power to you. You will still find it of value to outsource aspects of the product engineering function. Don’t over-burden yourselves in the early days, when agility and flexibility should be your mantra.

There’s no doubt that you could do it all yourselves. You could build the capacity in-house, you could maintain the right quality and control within your own premises. But unless it’s your passion and expertise – why would you? Outsource some parts of the development lifecycle to free up your precious time for your core competencies.

It may be a difficult decision to outsource the creation of your business’ star new product. However, it can be a strategic decision that gives your organization a huge fillip. Intelligent outsourcing is key to delivering expertise and flexibility at a crucial moment, without losing control or accepting too much risk. Do ask our team for a consultation today.