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Posted on August 5th, 2011, 4:03

It is belief that software product companies can emerge from the recession stronger than before and with greater advantages than their peers if they leverage the downturn to break down traditional walls and leverage best-of-breed R&D specialists. An R&D specialist with an innovative culture at its core brings greater perspective to the table and can help businesses create a global network of collaboratories that are aligned around common goals.

Five years ago, no self-respecting software business would have considered outsourcing any of its core software product development. Today, there are very few businesses that don’t. This same trend applies to software product research and design, which also stands to benefit greatly from a global “collaboratory” approach. As a result, software companies are increasingly turning to product engineering service providers and ideation services in addition to leveraging their product engineering teams.

As a product engineering services firm with software R&D as its core focus, GlobalLogic’s processes, methods and technologies have evolved at a much faster pace than those of most software product companies. Our work with hundreds of clients in dozens of industries enables us to provide a much broader range of skills. By combining our breadth of knowledge with a client’s deep market expertise, companies are delivering products that are more cutting-edge and competitive. From SaaS application development to E-commerce solutions to medical device software development, a collaboratory approach to software product R&D results in exponential innovation.

Focusing on the ‘R’ in R&D
As a major analyst stated in a recent report, “A product development company like GlobalLogic is doing more than just providing offshore developers — it is seeking to collaborate with clients at a strategic level and provide executives with on-demand access to global innovation networks.”

In contrast to most IT services firms, in which employees are driven to follow the letter of the spec and many times even actively discouraged from thinking differently, GlobalLogic’s product engineering teams are encouraged to immerse themselves in the solution and come up with creative ways to improve upon it. Our default method is based on Agile product life cycle management platforms and SCRUM principles that allow us to take calculated risks and adapt swiftly to change. It is this culture of creativity and flexibility that truly sets apart.

In addition to consulting with clients on product roadmaps and technology trends, GlobalLogic also offers advisory services to help clients better understand their true core and context issues and to make globalization a more natural by-product. By working with hundreds of software product companies, GlobalLogic has gained a unique knowledge of operating models, cost structures and trends in global R&D. Its advisory services enables clients to map a longer-term course for optimizing their R&D dollars over many years.

Innovation in Outsourcing
The recent economic downturn has spurred firms to begin looking beyond simply outsourcing to maximize their R&D dollars. Two trends have become increasingly common: (1) to leverage open innovation and (2) to move towards an outcomes-based sourcing model.

Let’s start with the concept of open innovation. There is a popular expression that “two minds are better than one,” the assumption being that a greater variety of thought going into an effort will result in a better quality of thought coming out. Confining research to one product engineering  lab in one location limits your perspective. This is why more and more firms are turning to collaboratories, or networks of labs that bring together different groups in different locations – often from multiple organizations.

In an interview with McKinsey Quarterly, technology entrepreneur Judy Estrins said, “Successful companies are … expected to produce predictably without surprises.” She went on to stress the importance of “loosely coupled” labs as a better means of fostering innovation, commenting that this approach increases one’s ability to avoid the pitfalls of regimented methods and conventional thinking.

Key to a successful collaboration is the alignment of goals. Often sourcing relations are structured around goals that put clients and services providers directly at odds. For instance, a flat hourly rate will encourage a client to request the most senior product engineering team possible while incenting a product engineering services provider to deliver the most junior. Obviously these opposing mentalities will not lead to a very healthy partnership.

A different approach is to align both parties around some common goal such as reducing the number of support calls per user. This so-called “outcomes-based” partnership is becoming more attractive as a great percentage of firms’ software products are being built outside the traditional walls. In fact, GlobalLogic utilizes goal-based partnerships instead of traditional contracts to ensure the delivery of high-quality products rather than just meeting the letter of the contract. In this way, we serve as a true collaborating partner in our clients’ software R&D rather than as a vendor.

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By Josephmax, in: General