It’s no secret that the economic downturn is putting extra pressure on software companies to cut costs and capture more revenue. This leads to a familiar scenario: in order to close a deal, your company commits to the development of some product extensions, custom applications, customer-branded user interface or other new work. Over time, the unpredictable, fluctuating development load looks like the yo-yo chart. The response of most companies is to cannibalize the core R&D team to handle the peaks, constantly distracting them from work on the strategic product roadmap. Since the customer-specific work usually requires knowledge of proprietary software and direct interaction with end customers, outsourcing isn’t often considered for this type of work. With the right partnership model, however, some companies have used outsourcing to become more responsive to customers and reduce costs. Vaultus Mobile, Bridgewater Systems, Brix Networks/EXFO, Nakina Systems and others have had good success with a partnership model where the outsourcer (in these cases bitHeads) invests in building and maintaining an R&D bull-pen that is familiar with their products and can be called on as required to handle the development peaks. They have reduced average development costs by up to 50% by only paying for productive development teams when they are needed and not having to ramp-up new contractors each time. Also, by keeping their core R&D team focused on new features and next-generation products, these companies will be in a stronger competitive position as the economy recovers. Read more about these case studies in the white paper on Responding to Customer-Specific Requirements.