Innovation advantage: insourcing engineering

Abstract

Purpose

The authors make the case that insourcing engineering is a strategic investment in developing a company’s core competence and innovative capacity needed to continually push the frontiers of its markets, which is essential to creating fresh marginal value under all scenarios.

Design/methodology/approach

The authors layout the risks of outsourcing engineering and explain why the benefits of insourcing engineering are great and likely to grow more critical in the near future.

Findings

As the Internet of Things opens vast new possibilities for differentiating nearly everything such companies might build, innovative engineering to achieve superior connectivity, functionality and invulnerability becomes critical to competitive advantage.

Practical implications

Insourcing engineering not only resurrects the innovation and IP that distinguish sustainably successful market leaders, it also increases the ability to keep ideas secret until the production stage, thus allowing for full commercialization.

Originality/value

A leading practitioner at General Electric describes his firm’s experience with outsourcing engineering and why it reversed course and began insourcing engineering again.

Citation

Chaudhury, R., Gerdemann, D. and Kapoor, B. (2015), "Innovation advantage: insourcing engineering", Strategy & Leadership, Vol. 43 No. 6, pp. 3-9. https://doi.org/10.1108/SL-08-2015-0066