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June 17, 2015

10 Points to Consider When Outsourcing R&D

Research and development (R&D) is the lifeblood of every technology company.  But it comes with challenges: namely, how to you accelerate your R&D cycle while making your dollars go further.


However, building the products of tomorrow takes proper investment today, which often means companies either short R&D or barely partake at all. Here is how R&D can benefit your specific company, how you should go about using R&D and how outsourcing is often the answer.


  1. Not Just For Big Companies
    First, it’s important to realize that R&D is not just for big companies, but that startups and smaller software companies can also benefit from R&D if they invest right. In fact, without R&D, small companies never even have the chance to become big companies.

  2. Boosts Innovation
    Some of the biggest advances in computing, applications and IT have come about due to investments in R&D. Companies that shortchange their R&D departments or researchers usually don’t stick around for long.

  3. Solidify Time to Market
    Unfortunately, researchers are often turning all too late to utilize outsourcing in the development of a product. This failure to utilize outsourcing early in the R&D process leads to budget overruns, products that aren’t finished on time, and sometimes even projects that never manage to finish at all. Outsourcing research and development helps reduce time to market and help ensure a product that actually sells.

  4. Increase in Research Personnel
    The United States is falling behind when it comes to producing scientists and engineers, which helps underline why there’s such a drastic talent shortage in the country. However, other countries such as China, Korea and Taiwan are increasing their research investments at a far faster rate than the US and turning out a greater number of scientists and engineers. That the smart software development companies are moving their R&D to these types of locations in order to take advantage of the abundance of quality talent available.

  5. More About Collaboration Rather Than Cost Savings
    Outsourcing research and development isn’t just about cost savings, but realizing collaboration across borders. Considering the ample experience other country’s software developers and engineers have working US companies, it means that productive collaboration is more possible than ever. This enables your company to work together with your R&D engineers as a team, and build a better product.

  6. Outsourcing Allows Access to the Best Talent
    Ultimately, only looking locally is often going to mean you don’t have the money or resources necessary to invest in R&D the way you should be doing. Searching at the global level means you can perform R&D with talent from all over the world. With Accelerance, you’ll have access to R&D engineers and creative professionals who are building some of the best software across the web.

  7. Competitive Tool
    R&D is not just about building great products, but it’s also about staying ahead of your competitors. Using outsourced R&D helps you cut costs and help your company remain as competitive and healthy as possible going into the future. Outsourced R&D specialists also often has more experience and resources than would be available to you, which is why they can do more for less

  8. Utilizing the Three Tier Communication Approach
    You should think about utilizing the three their communication structure to maximize your R&D experience while outsourcing. This three-tier approach involves on a triangle pattern, and at the very bottom, you would have a dedicated project manager that communicates with your R&D staff every day or every week via teleconference depending on your needs.
    Going up a level, a operational manager develops a relationship with his or her counterpart within your outsourced operation in order to develop strategic and tactical goals, and working towards establishing efficiencies in the process. At the top, a general manager communicates with your outsourced software company’s CEO or general manager counterpart to gain a broad vision and overview of R&D development.

  9. Two Types of R&D
    External R&D – This type of R&D is usually based on contracting out to a university or specialized research organization or institution. These organizations usually have extensive research resources and equipment to accomplish the needed research, but organizations often fail to learn from the R&D process and only receive the final results.  
    Joint R&D – This type of R&D usually involves companies joining together towards a common R&D objective. This provides a low-cost approach since companies are sharing the burden of research investment. On the other hand, the disadvantage is that other co-sponsors have access to all the results, which means the research is shared between companies.

  10. Integration in International Knowledge Flows
    Ultimately, outsourcing research and development allows you to tap into international knowledge flows. That means you’re connecting with software R&D research teams that have been producing innovative ideas and products for years, and have the ability to supercharge your own software development process.


Andy Hilliard

As CEO, Andy leads and advocates for the globalization and collaboration of great software teams with companies in search of talent, innovation and a globally-distributed extension of their engineering function and culture. Andy founded the ground-breaking nearshore software development services company, Isthmus Costa...

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