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Outsourced Product Development (OPD)

Definition - What does Outsourced Product Development (OPD) mean?

Outsourced product development (OPD) is a practice in which an organization hires a third-party provider for the development of products and services in a variety of fields (such as IT, business, communication and HR), and even idea generation.

OPD success depends on finely integrated strategic planning, communication, collaboration, management and specialized resources.

Techopedia explains Outsourced Product Development (OPD)

OPD implementation success hinges on continuous and consistent communication between decision makers, especially managers, engineers and business owners. This collaboration streamlines communication, production quality and, ultimately, customer satisfaction.

OPD implementation recommendations include:

  • Development during daylight hours
  • Testing during evening hours
  • Outsourcing to locations north and south of an organization's corporate office and production facilities to minimize time zone variances
  • Recruiting and hiring high-quality team members. Distance should never detract from innovation.
  • Small teams are more efficient than large teams. Thus, management must establish a balance to ensure team synergy.
  • Intellectual property (IP) costs are part of doing business. If IP considerations are not enforced, it may be necessary to switch providers or create innovative products for customer retention.

Logistical skills require innovation, but the primary objective is closely monitoring OPD's effect on production quality and customer satisfaction.

The IT industry (including offshore branch offices of giants like Microsoft, Adobe and Cisco) accounts for approximately 15 percent of the OPD market.

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