Executive Briefings

Despite Risks, Many Still Outsource in Developing Regions

It's really no surprise that the offshoring of global product development (GPD) has become a $13bn market. But this is what is surprising: Even though companies surveyed last year consider new product development and launch (NPDL) core to their businesses (unlike most other outsourced activities that are usually considered non-core), they still outsource in developing regions despite the inherent risks: security, supplier qualification, low compliance standards, product quality, slow time to market, geopolitical unrest, and lack of regulation. In fact, 30 percent of organizations are outsourcing some aspect of their NPDL processes. Forty percent plan to outsource over the next 12 to 24 months, and another 27 percent currently have captive development centers in place.
Source: AMR Research, http://amrresearch.com

It's really no surprise that the offshoring of global product development (GPD) has become a $13bn market. But this is what is surprising: Even though companies surveyed last year consider new product development and launch (NPDL) core to their businesses (unlike most other outsourced activities that are usually considered non-core), they still outsource in developing regions despite the inherent risks: security, supplier qualification, low compliance standards, product quality, slow time to market, geopolitical unrest, and lack of regulation. In fact, 30 percent of organizations are outsourcing some aspect of their NPDL processes. Forty percent plan to outsource over the next 12 to 24 months, and another 27 percent currently have captive development centers in place.
Source: AMR Research, http://amrresearch.com