We cannot take the decision away from you. But we can make it easier.

Outsourcing parts of the corporate service delivery is a hot topic at the moment. Especially in electronics and software development, more and more companies are benefiting from the advantages of greater flexibility and cost savings, as well as from access to the special expertise of external engineering partners.

However, outsourcing also carries risks. For this reason, the outsourcing of engineering services needs to be well thought out and prepared. The essential point here is to be aware that outsourcing is not simply a stopgap solution but far more an excellent opportunity to exploit combined synergies.

Opportunities for greater success

The word outsourcing means “using outside resources” – a division of labour with external service providers. When correctly identified and understood, opportunities can be derived for every company.

Opportunity No. 1: Relieving the workload on human resources

By outsourcing services, you free up staff to be deployed elsewhere. For example, the development team may focus on its expertise and core competences, while additional tasks are realised in collaboration with a specialist external partner. Thus, new products are realised more quickly and can be launched on the market.

Opportunity No. 2: Increasing flexibility

Is your company going through a strong growth period? Or are your business sectors subject to strong short-term seasonal or cycle fluctuations? With outsourcing, you are able to rely on an experienced pool of resources which is available as and when required. In phases of low workload, capacity might then be readily and flexibly reduced.

Opportunity No. 3: Cost savings

By outsourcing services to specialised companies, cost savings of up to 25% can be achieved. These reductions are due, for example, to the reduction of fixed costs, the use of lower infrastructure costs and/or the elimination of additional, expensive know-how development.

Opportunity No. 4: Efficiency and quality benefits

As an outsourcing partner, we possess systems developed in-house, optimised methods and technology expertise or solution approaches from a wide range of industries. By outsourcing services to us, you will be able to benefit from this knowledge without the need to invest in expensive experts yourself. This way, process efficiency and the quality of services are significantly improved.

Opportunity No. 5: Transparency

In addition, outsourcing offers you the possibility to open up new business options and to improve the transparency of the value chain. In this way, services by external partners are easy to monitor in terms of costs and quality. The business processes will become more transparent and the cost sources more clearly identifiable.

Risks as an opportunity

Only by knowing the risks can you take countermeasures in good time and lead the planned outsourcing project to a successful conclusion.

Risk No. 1: Outsourcing as a stopgap solution

If outsourcing is used purely as an emergency solution and is only considered when a company is fighting a lone battle on multiple fronts, success normally comes at the price of additional effort and often also with extra costs. If the outsourcing of engineering services is well prepared and well thought out, however, the expertise of the development partner becomes available at an early phase of the project. In most cases, it is alternative approaches or new ideas that can lead to more economical solutions.

Risk No. 2: Misunderstandings

In the absence of open and transparent communication, misunderstandings may arise easily. For example, unclearly defined contracts or specifications can lead to conflicts between the customer and the service provider and hinder successful collaboration.

Risk No. 3: Absence of process orientation

Project interfaces that are not properly defined hinder coordinated procedure. A reliable calculation of the time required and the project costs is made more complicated or even impossible.

Risk No. 4: Over-enthusiastic cost estimate

Often the total costs of outsourcing are insufficiently accounted for in the estimate and, for example, only the costs of the service provider are included. However, in most cases there are also in-house costs (personnel, infrastructure etc) that have to be included in the forecast.

Risk No. 5: Lack of accountability

Employees or the team are internally informed too little or too late about the planned outsourcing. The result is a lack of understanding and opposition, which makes cooperation more difficult.