Outsourcing: from assembly line to extended team

Outsourcing

Recently I became interested in outsourcing. Partly because we addressed the subject in reaching CMMI level 2, partly because I recently read the book “The World is Flat” in which “Thomas L. Friedman believes the world is flat in the sense that the competitive playing fields between industrial and emerging market countries are leveling. Friedman recounts many examples in which companies in India and China are becoming part of large global complex supply chains that extend across oceans …” (from Wikipedia).

In Managing outsourced teams. Balancing innovation with predictability. two different approaches to create a remote engineering organization:

  • Assembly line (requirements are sent overseas to be built there as specified; prerequisite is that the requirements are really good and stable)
  • Extended team (requirements are sent overseas and interpreted, a design or prototype will be created overseas and approved by the main office, emphasizing on collaboration).

Based on their experience the authors suggest that the best way to go about this problem is to start on the Assembly line “mode” and to transition to the “Extended team” mode as soon as you feel comfortable to do so.

hidden costsI think that’s a sound suggestion! Beware that on both approaches, there are lots of hidden costs when outsourcing.  

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