OUTSOURCING

Organizations are increasingly depending on outside agencies

to meet their T&M needs.

There is

a transformation taking place in the traditional, even stodgy,

world of Test and Measurement (T&M). Traditionally, organizations

maintained test teams that would determine what to buy and how

to use them. These test teams would also develop in-house software

or fixtures to enhance their test capability.

More organizations

are increasingly looking outward-usually to test instrument-vendors

or to specialist test-integrators for test solutions. They expect

their suppliers to provide the complete test solutions, instead

of developing it internally. Figure 1 describes the transition

over the years. The trend is to not only outsource the test

(system) development, but also to link the investment to business

results.

Test outsourcing

could be of two varieties-test engineering or test strategy.

Test engineering is an extension of test instrument products

that could involve automation, fixturing, and interfacing the

test instruments to other equipment such as robotic equipment

handlers or telecom equipment. Test engineering requires a lot

of expertise in automation and integration. The test instruments,

in this case, become part of a large "system" and

the entire system must perform to requirements. Test engineering

works when the test needs are explicitly defined.

Test strategy

is a different matter. Here, an organization may just have its

quality or production goals defined, and the test strategy (parameters

to test, periodicity of test, equipment types, etc.) needs to

be defined to meet the goals.

Why

Outsource?



There are many reasons for the shift in strategy. The main driver
is the focus on core business. This is not to suggest that testing

is an unnecessary process to be dispensed with. On the contrary,

it is still a vital part of quality and design validation. The

current thinking is to draw on the experience and knowledge

of external people, specifically whose core business is test,

for these somewhat inter-related reasons:

Lack

of in-house expertise.



This is the most obvious reason. Testing may be a vital part
of the organization''s success but may not fall into the core

activity. For example, an automotive company may use test equipment

to understand the noise and vibration of a vehicle. Their mechanical

engineers can interpret the results of the tests without requiring

a deep understanding of the test instrument or the technology

behind it. The situation becomes more complex if the testing

need is not met by a single instrument, and requires an entire

system. The test engineering capabilities may not be available

in the organization itself.Another example could be telecom service providers. They could

be running complex, hybrid technology networks where it may

not be possible to have a team of engineers covering all the

technologies. A new entrant will need time to have all the in-house

engineers or technicians trained to handle new technologies.

A third example could be a government security agency. Its core

activity would be intelligence gathering. And it may use test

equipment either as intelligence-gathering tools, or to use

them to maintain such equipment. They may not have, indeed may

never need, deep understanding of test technology.

In all these

situations, it makes sense for the organization to let their

test equipment supplier suggest the optimum test strategy or

equipment. It improves the organization''s productivity without

sacrificing quality or business goals.

Focus

on the core business.



An organization''s business success may depend on more than just
quality products or services. For example, a cellular phone

manufacturer. In this case, business success may be a combination

of several factors-faster time-to-market, lower cost, and so

on. In the intensely competitive cellular phone market, cost

is a major factor-phones must be manufactured in large volumes

to achieve economies of scale. It is much simpler for the manufacturer

to specify their needs in terms of parameters, throughput, and

budget, and let their instrument vendors work out how best to

meet their needs.



Another advantage of outsourcing is the spreading of project
risks. When the test strategy is outsourced, part of the risk

involved in making the project successful is transferred to

the test equipment vendor. There is also the added benefit of

using the larger resource pool of the test solution vendor.

That makes sense for organizations trying to create new test

systems or methods within specified timeframes and budgets.

Outsourcing

test engineering or strategy could have several advantages.

The main advantage is productivity improvement. Existing staff

could be deployed where it makes most business sense. There

could also be significant cost benefits. An outside supplier

could deliver a complete test solution that costs less to procure

and maintain. The organization need not spend more money training

the test teams. Depending on the way the solution is contracted,

the test equipment vendor can also be made responsible for completely

supporting the system for a specified period-right down to upgrades

to the latest technologies or features. This could translate

into very significant cost savings over a period.What

Does it Take to Outsource?



While it offers great advantages, outsourcing test to an external
party does have its share of risks. First, it needs an attitudinal

shift. The equipment supplier needs to move from being a vendor

to a strategic partner. Test teams need to work very closely

with the supplier to ensure that the organization''s key goals

are met. The supplier needs to understand the customer''s business

goals well. The level of understanding required spans technology

issues, business goals, market situation, and sometimes even

the needs of the customer''s customers. This is often difficult

as organizations are unwilling to share confidential information

for either competitive or security reasons. Annual production

targets, internal circuitry or design, equipment specifications

are all highly proprietary and confidential information. This

is also just the sort of information a supplier may need to

develop the right test system or strategy.

Outsourcing

becomes difficult when such information is not available to

the supplier. A normal method of dealing with this situation

is a "non-disclosure agreement" with the supplier,

to ensure that confidential information is protected. All relevant

data-parameters, specifications, throughput, user interface,

reporting format, and so on-need to be nailed down and agreed

upon before the contract is finalized.

The second

risk is the supplier''s credibility. When the customer makes

a big shift in business strategy, the key issue will the supplier''s

ability to meet the customer''s business needs. Outsourcing can

be effective only when the customer feels confident that the

supplier has the expertise, financial health, and support capability

to become a strategic partner.

Is

It a Universal Trend?



No. Outsourcing is a key need for some situations and is not
the general shape of things to come. Much of the testing methodology

is still traditional and is expected to continue for some time.

This is especially true for organizations that have large and

competent in-house teams, or where test system development is

an essential activity. Outsourcing is a new phenomenon in very

specific customer situations where in-house expertise is lacking,

where test is outside an organization''s core activities, or

where a test equipment supplier can provide a solution more

economically.