Over the years, the word outsourcing has developed a very negative connotation. However, the reality is that in many scenarios companies do have to consider outsourcing product development. In this blog we examine the various development options available to companies when building consumer facing mobile products. You can use this as a guide to help you think through options that you should consider when developing a new product.
Consumer facing apps within an enterprise are generally sponsored by one of three entities - product or digital, sales and marketing, or customer service. In the table below we look at the type of apps produced by each of these entities, and some examples for each type of app.
|Product||Core product or service being offered is digital||Bloomberg for iPad, PayPal Here, Nike+|
|Sales and Marketing||Application helps drive marketing campaigns, or maximize sales||Iron Man 3 - The Official Game ,Ikea Catalog, Coca-Cola Freestyle|
|Customer Service||Application helps improve customer service and experience||SQ Mobile, Hilton HHonors|
The key idea put forth there was that unless you are an information technology company and building your core product, outsourcing development should always be on the table. Based on this I looked at the app examples above, and at the options one should have considered when developing these apps.
|Example||Company Type||Product Type||Optimal Strategy|
|Bloomberg for iPad||Finance/Tech||Core||Develop In--house|
|PayPal Here||Finance/Tech||Core||Develop In-house|
|Nike+||Fashion/Apparel & Accesories||Core||It depends|
|Iron Man 3 - The Official Game||Media & Entertainment/Various||Non-Core||Outsource|
|Coca-Cola Freestyle||CPG/Food & Beverage||Non-Core||Outsource|
|SQ Mobile||Transportation/Airline||Core||It depends|
|Hilton HHonors||Accommodation/Hotel & Lodging||Core||It depends|
However, outsourcing is a very broad term, and there are a plethora options to consider when looking to outsource. Below are the primary and secondary options available for the examples mentioned above in scenarios where outsourcing should have been in play.
Lets consider the rationale for each of the selections above:
- Nike+: Here the product is part of a core product or service that company is providing, hence if the company has the ability to develop it in-house then the company should. That said, the development of the app itself could be outsourced to a team that specializes in mobile product development. Alternately, a full service agency can be used, however the company might or might not require the additional services that a full service agency offers, and hence might end up paying a higher margin than is required.
- Iron Man 3 - The Official Game: The general industry norm here is to license out game development to external entities, which is what Marvel did here, and it remains the recommended strategy. Outside of this, engaging with a company that specializes in game development for media companies can also be a potential option.
- Ikea Catalog: A catalog is probably something that the company releases on a periodic (quarterly, semi-annual or annual) basis, and hence the company should have standard templates and forms that it can use to develop the digital collateral internally, however in the case of this particular app, Ikea was rolling out an augmented reality feature. They could have considered a full-service marketing agency for this, but given the degree of specialization required, a mobile development team that specializes in augmented reality should have been the primary option.
- Coca-Cola Freestyle: This app was primarily built to support the discovery of Coke's new freestyle machines. Releasing this app should have been part of a wider product marketing campaign, and hence should have been managed by the full service agency responsible for the campaign. This full-service agency would then have the option of developing the application internally, or outsourcing it to a specialized mobile product development team.
- SQ Mobile and HIlton HHonors: In both these case the apps have some very deep integration into the back end systems, including hotel and airline reservation systems, real-time flight scheduling systems, CRM systems, and ERP systems. This type of work is best handled internally or by a full-service Systems Integrator (SI), or a boutique consulting firm that specializes in that particular industry. The development of the front end of the mobile app itself could very well have then been outsourced to a mobile product development team to maximize the UX/UI and development expertise offered by the specialized mobile product development team.
In conclusion, while the decision to build internally vs. to outsource is an important one, it is equally as important to consider the options available when outsourcing and to choose the option that makes most sense for a given scenario.