Although firms increasingly outsource front end product development activities to production suppliers or design consultants, this practice has received little scholarly attention. The few existing academic studies report high failure rates but generally present only the client firms’ view of the causes. Our first results from in-depth interviews of both clients and consultants give a richer picture of enablers of success and causes of failure. We confirm some previous findings(internal divisions within the client, “poor communication” between parties),identify new ones (inadequate client capabilities, failure to transfer design intent), and combine them into a comprehensive model of outsourced product development that includes negotiating project scope, continuously managing expectations, and carefully re-integrating the design output into the client’s operations. Finally, we classify several types of client dependency (need for new ideas, extra capacity, or specific technical expertise) and highlight the particular hazards associated with each.
Palm, William J. and D.E. Whitney. Improving outcomes in outsourced product development: a joint consultant-client perspective. Proceedings of the 21st Annual Conference of the Production and Operations Management Society, Vancouver, BC, May 2010.