The benefits of bringing in a third party design service

So what is the answer – bigger design teams? In some cases it is, but in others, according to Marc Lafferty, managing director of Acal BFi UK, 'the underlying trend is based on our customers focusing on their core competencies and working with trusted partners to provide solutions around these competencies'. So are the functions that are outsourced those that are sufficiently routine not to count as a core competency? Not so. according to director of ByteSnap Design Dunstan Power. "Rather than outsourcing the 'sufficiently routine', the opposite is usually the case in electronics design, where companies tend to outsource the unusual (lumpy demand) activities when using an internal staff member doesn't make sense or hiring a new employee with the right specialist skills is difficult. "For example, outsourcing works well with new product development – a company may not want to employ designers to work on that new product internally since, once the design is completed, another new product may not be required for several years. Instead, they hire external designers to bring the new product from concept to market. I realise that this isn't necessarily the traditional view of outsourcing, but I think it is more realistic in the professional field. It is like hiring a lawyer to carry out house conveyancing or using an accountant to create end of year accounts for you – you hire a specialist for infrequent and demanding projects." Specialised services Equally, a service may require such specific equipment, as well as expertise, to make it unsustainable as an in house capability. One such service is emc testing, as Chris Marshman, development director of York EMC Services, points out. "The main reason to outsource emc/electrical safety services is access to the specific expertise, skills and facilities we offer. Whilst testing in house is an option, unless there will be sufficient throughput of products, the 'capex' is unlikely to be justified. Meanwhile, unless instrumentation, such as a receiver, is being used regularly, it is relatively easy to make mistakes." Distributors are also becoming a font of (often free) knowledge into which engineers can tap. Some distributors use their expertise in certain technology areas as a way of differenting themselves from their competitors. Walter Puhl, rf business development manager at distributor MSC, commented: "People are badly informed about Bluetooth Low Energy for example; they think it is compatible with the Bluetooth Classic, but it is not. So we do a lot of design consulting on these issues – what people want to do with BLE and informing people of its limitations. Sometimes, companies come to us with an idea about something they want to integrate and we may be telling them that what they want to do is interesting, but they are using the wrong technology – it might not fit because of data rate or radio range. More and more, we are recognising that people are missing knowledge that we can add. It is the difference between us and some of the other distributors, who might just want to sell the parts." Another distributor, Anglia Components, is also seeing this growing reliance on third party services. "Not only are design engineers becoming much harder to come by, but design is also becoming much more complex," commented Andrew Pockson, the company's divisional marketing manager. "Every design now needs to meet power and emc regulations, while wireless designs have additional regulations to address and there are market specific regulations in many fields such as medical and high reliability. "It's unlikely that an in house team would be able to cover all of these areas, so many companies will need to bring in third party design services who are experts in a particular market in order to get their product to market on time and on budget." Link to manufacturing The outsourcing of all services is clearly a growing trend and one that is evolving to mirror other trends in industry. An obvious example of this is the shift of manufacturing away from the oem and on to the cem – and this has consequences in the design environment. "We have seen a big increase in companies who not only want design services, but also want to be introduced to CEMs and who want management of the production of their products," said Power. "This allows the customers to minimise the number of internal staff in that area. Ten years ago, as a consultant, I passed manufacturing data to the customer, then moved onto the next design. Now, we are also passing the data to a third party and managing them as part of the process." . Marshman agrees the design services sector is on the up and argues that there are both positive and negative reasons for this. "Recession has meant many organisations are lean and now rely on third parties. Lean also means getting engineers away from the workplace is difficult. Training budgets have been cut and it is therefore difficult for engineers to maintain their CPD; there is a shortage of professional engineers, which will only be addressed in the longer term by promoting the electrical/electronics engineering profession! It could also be argued that the main advantage to a manufacturer or design house, of using a third party to supply specialist services is to reduce risk and to help ensure development hits its milestones. It is always galling when a product is presented for compliance testing and then fails. It is galling for the developer, because undoubtedly there will be rework and resulting delays in getting the product to market; and it is galling for the testing laboratory when it knew that its skills could have been used earlier and prevented a costly mistake." The growth in design services seems therefore to be down to differing dynamics within individual companies – a smoothing of workload and stability of permanent workforce, the need for specialist facilities or a particular skill set, or just a focus on conceptual design and the building of a cost effective business model around that.