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12 Tips to Outsourcing Development Success

Tue, 10/26/2010 - 12:47pm
Tim Bosch and David Ennen

More medical device OEMs are outsourcing a portion or the entire product development process than ever before. However, when relying on a vendor partner to achieve a successful outcome, OEMs must ensure clear communication is established and maintained. This article provides 12 tips to accomplish this.

It is well known that medical device manufacturers face increasing pressure to develop quality products faster while controlling costs. Many of these manufacturers have fewer resources to dedicate to development projects, or are reluctant to add staff. Outsourcing product development is an option, but one that must be carefully managed to ensure success.

1. What to Create?

One of the first things a manufacturer needs to determine is whether they know what they want to create. Regardless of the mode of development, if the device is not well characterized, device development is at risk. This characterization must reflect the concepts, expectations, and needs of all stakeholders. The device manufacturer must determine and clearly communicate cost of goods, services, support, and product goals.

2. Forge a Solid Working Relationship

It is important that the device manufacturer dedicate staff to not only to oversee and manage the project, but also to forge strong working relationships with its preferred vendor with assigned roles and responsibilities. The OEM’s project staff must have the experience and approach that foster clear channels of communication. These channels of communication are the most critical aspect for success. Trusted communication serves as the mechanism to ensure the vendor clearly understands the needs of the manufacturerdevice functionality, change management, development process, cost, and timelines. The vendor needs to communicate status and the occasional and inevitable setbacks in a transparent way.

3. Quality and Regulatory Needs and Strategies

During the vendor selection process, it is important to ensure that the vendor understands and can support the quality and regulatory strategies for the project. The OEM bears the responsibility for ensuring the quality system approach is compliant. Agreed-upon, documented quality plans are heavily influenced by the regulatory strategy, so a well thought out strategy needs to be factored into the processes and controls. Periodic quality audits ensure compliance with the approved quality system approach.

4. A Development Methodology That Works

A development methodology requires a focus of its own so that the methodology works for both organizations. What lifecycle approach is the vendor going to use for the development process? Are the necessary controls in place to ensure that the project is properly progressing? The methodology must be established early and approved by both organizations to ensure that the vendor can meet expectations and outputs of the process to meet the OEM’s needs.

5. Demonstrable Evidence of Accomplishment

The initial selection process should go beyond a vendor’s website or literature to determine the vendor’s strengths and weaknesses. Has the vendor been successful in developing similar products in the past, on time, and within budget? Check references and ask questions about the vendor’s technical capabilities, resourcing strategies, and metrics among other questions. Once development begins, concrete deliverables must be observedplans, requirements, design, and softwareat regular intervals so that progress can be independently evaluated.

6. Protect Intellectual Property

Although the OEM is outsourcing the development of its product, make sure to protect ownership of what is developed and preserve the intellectual property inherent in the product. This starts with the contractual relationship established with the vendor. This document must be explicit about expectations regarding ownership of algorithms, interfaces, and any other aspects that represent the unique value of the product.

7. Make Words Match Deeds

The best way to demonstrate understanding of the product and the manufacturer’s expectations is to regularly exhibit tangible progress beyond a set of documents. Manufacturers benefit from seeing a prototype, or real software, and hardware. It gives the OEM a chance to interact with the product in a way that goes beyond requirements and designs. This can lead to early course corrections that are easier for everyone, rather than in the late stages when time, money, and patience are often in short supply.

8. Manage Requirements; Don’t Just Write Them

Real management of requirements goes beyond well-crafted requirements statements. The vendor must support traceability of requirements to other artifacts. Be able to articulate and track a variety of attributes about requirements. It is only by managing requirements that informed adjustments can be made; the impact of changes can be assessed, scope managed, and other activities that center on requirements analysis. It is through sharing and interaction that a mutual understanding of the intent of the requirements can be developed.

9. Actively Manage Risks and Dependencies

In a collaborative outsourcing relationship, both partners must have the means to actively manage risk and dependencies. Regular communication that reviews risks and mitigations is important in maintaining predictable schedules that include contingency and mitigation plans. Include product risks as well as project risks; it is not going to matter much in the end if schedule and costs were managed successfully but the product misses its intended use or business expectations.

10. Establish a Strong Change Management Process

If there is one constant in product development, it is that things will change. Establishing a strong change management process to control changes, capture their potential impact, and confirm closure of agreed upon changes helps mitigate associated problems. By maintaining clear communication of proposed changes, the OEM can collaborate with the vendor and quantify its affect on the device under development while clarifying what scope creep may occur. Predictable development timelines are essential in a relationship and strong change management processes help to ensure achievement of goals.

11. Set Acceptance Criteria Early

Acceptance criteria, especially for medical devices, include not only a demonstration or verification against tests, but also documentation, process, and audit records, and sometimes labeling requirements. Experience teaches that acceptance can be contentious at the end without prior establishment of acceptance criteria. Define what is acceptable for open issues and defects, as well as functional and nonfunctional requirements and performance.

12. Transparent and Constant Communication

The most important aspect of a trusted relationship is to establish frequent, open, and straightforward communication. Remember both parties need to be open to the positive and negative aspects of the relationship. Budget, schedule, risk, and dependency missteps can all be mitigated when communicated early. Partners must discuss alternatives and work together to define corrective action.

Conclusion

Failures in outsourcing still occur all too often because some aspects of the key points made in this article are not actively managed by both parties. Each side must understand what is needed to enjoy a successful outsourcing relationship that mutually benefits both sides and results in a successful product development.

Tim Bosch is vice president of architecture at Foliage. David Ennen is project director at the company. Bosch can be reached at 781-993-5500 or tbosch@foliage.com, and Ennen at 781-993-5500 or dennen@foliage.com.

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