â€¢ The OEMs did not own the full IP (intellectual property) in the end, thus essentially restricting or eliminating the option to freely use the invested development, NRE, etc. for future generation products.
â€¢ After paying high NRE and development cost, additional licensing/royalty fees still existed.
â€¢ Because the OEM is dependent on the intellectual property of the design supplier, the OEM's internal teams were not independently enabled for the long-term.
Product Development as a Service
In today's competitive environment and challenging economy, OEMs have the opportunity to insist on better product development solutions to enable them for the long-term. Product development, offered as a service by a reliable product development service provider, offers the OEM the opportunity to control their product development on the OEM's terms, while at the same time augmenting the OEM's organization for the long-term. Thus product development as a service has many benefits:
1. Pay only for what you fully receive: As with other services, the OEMs should only pay for the service only after they receive the service - thus eliminating up-front NRE, fees, royalties, licenses, etc. Additionally, in today's economic times, OEMs can't afford to have all the resources on-staff, and therefore must seek more cost-effective resources solutions. Once you pay for it, it should be yours.
2. Ensure ownership: The OEM should fully own what has been developed and the associated critical technology, to use in the future as the OEM wishes. This includes the delivery of intellectual property such as source code, BOMs (bills of material), schematics, and other developed solutions and technology. Subsequently, the OEM should have full ownership with no strings attached and with no licensing fees or royalties at no additional cost.
3. Focus on long-term enablement: The product development service provider should be a viable long-term partner, interested in developing solutions that are unique and differentiated for the OEM. Further, the service provider should openly turn over "know-how" to enable the OEM to acquire the skill sets internally, and then support the OEM as needed (including training) with a focus on long-term enablement of the OEM.
4. Look for in-industry experience and service across both the technology and the business needs: The OEM should seek service providers who fully understand and support their end-to-end product development needs. This should include experience and services to ensure the OEM realizes the end-point: a finished product or solution that delights customers. Thus the OEM should look for a service provider that understands not only the leading-edge technology aspects, but also a service provider that fully understand and supports the OEM's needs. This expertise should range from concept, to customer needs definition, requirements definition, project management, R&D, test &D, to a fully produced and delivered solution.
5. Improve efficiency by leveraging the existing internal OEM resources across multiple projects: By implementing product development as a service, the OEM has great leverage to use valuable internal resources across multiple projects, thus increasing the OEMs ability to provide differentiated solutions across an entire road-map of solutions.
6. Lower total cost of ownership: By selecting a service provider that is proficient at specific skills and technologies, plus leveraging a service provider that has experience at "off-shoring" the right elements, the OEMs can significantly lower their cost of development while not compromising delivery.
7. True service should always come first: Everyone is delighted when they receive good service, no matter what. Good service requires an organization that has a mind set to delight customers based on a relentless passion for good service and humility. Good service never goes out of style.