Development of electronics comprises lots of different stages which also may require very different specializations. Between generating an idea and releasing a commercial device, companies inevitably pass through generating technical specifications, making approximate sketches, designing precise CAD projects of schematics and PCB layout, making nice 3D models of heatsinks and enclosures, and huge software development jobs. Then prototyping, testing, and setting up serial production. To say nothing of certification, packaging and shipping. Quite a job, right?
In the real world of small, middle-size businesses and startups not many companies are capable of handling all those product birth phases without the involvement of external vendors, outsourcing companies like EDALITY. Where to go then when engineering support is needed, to the freelance marketplace or to engineering companies? We tried to compare specificities of both approaches in a short review which may be useful for procurement specialists, project managers and other people responsible for decision making still having questions.
Service bureaus are able to hold long-lasting development flows and traditions. Companies more often invest in paid courses and conferences improving the knowledge inside the R&D team. Having many engineers working together means also cross-sharing information, mutual support in case of specific technical questions and general ability of specialists to cover together multiple adjacent fields of knowledge in addition to the core competence.
Freelancers usually have enough experience of working in companies. Such specialists are able to evolve their expertise but due to higher price competition on the marker of freelance have fewer resources available for that.
Design quality and further warranty
Service bureaus may provide a very high quality of design, though also can fail. However, cooperation with a professional R&D company normally gets insured with solid formal guarantees. But what is more important: outsource companies bear very high reputational risks permanently, within every development job.
Freelancers can deliver very high engineering quality as well, and also can deliver a disappointing result. Having only financial risks, if a problem has been found early enough, freelancers normally experience minimal reputational danger which naturally makes customers more vulnerable.
Service bureaus are rarely able to provide the same flexibility. Companies tend to use instruments habitual for them and painfully jump into the Customer’s task tracking and time tracking systems, for example.
Freelancers have a very developed instrumentarium of project management and reporting tools available, they can stay very flexible and detailed in reporting to a customer due to the possibility to control it fully by themselves.
Service bureaus normally hire appropriate PMs, business analysts, other line managers able to support a good communication level and help their own engineers to be better in that as well.
Experienced freelancers also support a very good communication level. But when you meet a less mature self-employed specialist, there may be problems with English, or with finding a high-speed Internet connection source, if working from Bali, for instance. So the professionalism of working negotiations is not always very high.
Speed of delivery
For service bureaus having a team of developers and administrators means the ability to reallocate resources, to play with schedules of projects and involve the bench of course when it is not empty. Also, having PMs and team leaders onboard helps to keep accurate priorities saving a project on the right track. So the general delivery speed and efficiency is normally high for traditional outsourcing providers.
Freelancers have to take care of everything by themselves, meaning that a project requires heavy reporting with multiple documents to be prepared, then it will certainly take time.
Engineering outsourcing costs
Service bureaus have a significant overhead causing on one hand higher prices but also smoother project flow. It may seem that the rates of such companies are too high sometimes. But instead, Customers get fewer questions back, better project control and risk management. So behind the higher rate purchasers can see the same or even lower level of expenses, especially within complex projects!
Cooperation with freelancers can be financially beneficial mainly in case of smaller projects requiring non-stop transparent R&D operation with minimum distraction.
- Hiring a service bureau is a better choice for more complex and high-end projects and devices. Vice versa, for 5-people startups receiving investments it also makes sense to partner with companies since they cover a wider range of technical specializations usually.
- Freelancers and development companies are comparable in terms of delivery terms and costs if consider all the factors behind the plain hourly rate. However, partnering with service companies gives more guarantees that the job will be delivered properly.