Product Engineering Outsourcing: Looking Beyond Cost Savings

One growing specialization under IT outsourcing is product engineering. Many leading IT companies have strategically planned PEO in order to realize significant cost savings. However, most of them have gained quality and reliability as well. On the other hand, some companies have different experiences with outsourcing product engineering. Sprint spent $400 Million and moved 1,000 of its employees to IBM to outsource its internal software development, and claims that rather than saving them money it cost them extra. In addition, they did not see the productivity enhancements that they were promised. When product engineering is on the line, will "Saving money" still be the key motivator for a company to outsource projects? In outsourcing product engineering, looking at just cost savings can only yield short-term improvements.