Aidan Petrie, Chief Innovation Officer and Co-Founder, Ximedica

The Rise of Integrated Outsourced Service Providers

Aidan Petrie, Chief Innovation Officer and Co-Founder, Ximedica

As corporations look for diverse expertise and variable costs through outsourcing as well as looking to bring more through the pipeline with ever tighter resources, the challenges to managing the outsourced partners also increase.

For several years, we have read articles and white papers on how device developers can gain efficiency in both time and money through the development cycle. Staggering the phase gate system and task stacking, prioritized sign off being a few of the methods. Many of these methodologies are able to be facilitated within corporate development teams where most of the members of cross-functional teams are present and can be pulled in and out of programs seamlessly.
 
However, as corporations look for diverse expertise and variable costs through outsourcing as well as looking to bring more through the pipeline with ever tighter resources, the challenges to managing the outsourced partners also increase. Purchasing industrial design, human factors, engineering or manufacturing capability is hard to manage when the activity might wax and wane in intensity though the phases of the program. These capabilities also get purchased as separate assignments and so that vital cross flow of information can get easily lost and outsource suppliers work in isolation and require significant management and communication skills from internal corporate managers.
 
Recently, we are seeing the rise of either integrated service providers or collaborations where capabilities come together to provide a one stop shop experience while being separate organizations. Often CROs will team with usability groups, or industrial design will tag up with engineering companies. So contract manufacturers, keen to control their pipelines, will package multiple service providers into a single offering.

In all cases there are advantages & challenges; the advantage is that there is clearer cost definition, expectations, accountability and single point contact, but the challenges are now that the burden of expertise and management are outside of the weight of management, expertise and accountability falls on the outsourced organization. This is a specialty and expertise not always built into the infrastructure and overhead structure of the service provider. It also changes the role of the internal managers.

 
For the time being it looks as though the outsourcing trend will grow and over time the number of capable integrated expert service providers will also rise. In the healthcare field a few will align with ISO 13485 and register with the FDA as device developers.

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