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Outsourcing of EDM/PDM occurs for a variety of reasons. Some companies find that it is cheaper for them to outsource EDM/PDM than to do it themselves. They outsource and save money. Other companies do not have the human resources to run EDM/PDM in-house, so outsource it. In other cases, a company will outsource because it wants to focus on the activities that it does best, the activities where it gains competitive advantage. Many companies compete on the quality of their design work, and they want to focus all their resources on producing the best designs. Such companies may feel that there is little to be gained by building up a large in-house team to manage their engineering data, so they outsource this activity. On the other hand, there are of course many cases where companies believe that the management of engineering data is a potential source of competitive advantage. They may believe for example that a skilled in-house team can provide just the right information service that is needed to win competitive advantage - and that by outsourcing they would lose this opportunity. They may believe that an in-house team will provide better access to information, enable the incorporation of more existing designs in new products, and reduce new product development cycles. Most companies' EDM/PDM needs lie between the two extremes of companies that see no benefit from in-house engineering information management, and those that see it as a major source of competitive advantage, and they will have divided feelings about the real value of in-house EDM/PDM. There will be people in these companies who will see EDM/PDM as an overhead, an added cost, another Information Systems activity that wastes valuable management time. There will be other people who believe that their engineering data is, or would be, of great value when managed by people with the appropriate skills. In such companies, the debate is often emotional and quickly becomes polarized. People on both sides of the argument seem to become irrational believers in their cause. In such a situation it is often useful to get a neutral external specialist to look at the issues, identify possible solutions, and carry out a cost/benefit analysis. Often some possible solutions may have been overlooked, since there is a wide range of outsourcing options. In some cases, EDM/PDM is outsourced to an organization that comes in-house to manage the system. In other cases, the information itself may go outside of the outsourcing organization. It will be found that many secondary factors have to be taken into consideration when examining the issues related to outsourcing, for example the abilities of the current EDM/PDM team, the likely future availability of EDM/PDM specialists, the current status of the organization's engineering processes and systems, and the views and structure of the IS department. Another set of factors to be addressed includes those in the external environment. The reputation of the company that will take on the outsourcing activity will have to be examined. Other companies receiving a similar service should be asked about the level of service it provides. Questions need to be asked about the EDM/PDM packages currently supported by the service company, the interfaces that are available, and the availability of staff to carry out development work. Security issues should be addressed. Increased information security is one of the reasons many companies give for using an EDM/PDM system. Outsourcing the EDM/PDM activity could lead to security problems. The service company must be able to guarantee data integrity and confidentiality. Other issues to be addressed include those concerning the ownership of the EDM/PDM systems used, and the rights to use the systems if the outsourcing agreement is terminated. A similar issue arises with custom-built software. What rights will the organization have to use special software developed by the service company if the outsourcing agreement is terminated? A related issue is the cost of custom-built software. How can the organization be sure it is not over-charged? How can it be sure that the software will be developed in a reasonable time? The costs and responsibilities of setting up the outsourced service have to be defined. Each party must be clear as to the tasks it will carry out. Who will input data into the new system? Who will be responsible for data and system conversion? The costs and responsibilities of operating the outsourced service have to be defined. Each party must be clear as to the tasks it will carry out, and the boundaries of its sphere of action. Rules have to be made about the location of data, the on-site and off-site storage of data, and the transport of data. Access rights to the data have to be defined for both parties. Data ownership has to be considered. Although all the data may initially belong to the organization that has decided to outsource its EDM/PDM activities, later the service provider may develop new data and metadata, and claim rights to these. Data corruption is another key issue. Who will be held responsible for corrupt data? Will the responsibility for correcting corrupt data depend on the source of corruption? Who has the responsibility for producing user documentation? Who has the responsibility for producing system documentation? Operating conditions and performance criteria must be defined. Backup and recovery procedures and schedules must be agreed. Availability of service, and access times to data have to be defined. Cost quotations from the service provider need to be examined in detail. How much is fixed cost? How much is time-and-materials? How much has only been estimated? What is potentially the maximum cost? What additional costs might arise? Future requirements need to be identified. Can they be met by the service provider? Which computers would they run on? Could they be run in-house? Would they be run by a third party? Cancellation issues need to be addressed. If the organization cancels the outsourcing agreement, what rights will it have to the programs that have been used? What rights will it have to programs that have been developed or converted? Will it get all its data back? Will it get all its metadata back? Will it be able to keep any documentation that the service provider has developed? Although it may appear from the above that an outsourcing agreement may be very difficult to set up, in fact so difficult that outsourcing should not be considered, it should be remembered that most of the above questions should also be answered by an in-house EDM/PDM team. In some cases, it may be that the in-house EDM/PDM team believes it does not need to answer such questions, or does not have the time to answer them, but it should realize that by answering them it will be providing a useful service to many users. |