Design outsourcing management: mitigating risks and achieving objectives

Increasingly, core activities—including research and development (R&D), innovation, and design—are being outsourced in practice. However, the research on this trend has focused primarily on R&D and innovation outsourcing. This study considers the relatively less investigated area of design outsourcing and key aspects of its management. Interviews with design experts point to distinct objectives for domestic outsourcing and offshore outsourcing. Generally, efficiency coupled with high quality is pursued by domestic outsourcing, whereas creativity that is tailored to firm particularities is expected from offshore outsourcing. The objectives are intrinsically challenging, especially for the unmeasurable criteria including quality and creativity. This study finds there are key aspects to be considered to accomplish the objectives: supplier selection and risk mitigation. While further exploring these factors, the study sheds light on the role of in-house designers overseeing the selection and managing the risks. The findings of this study are an important addition to the body of literature on design management, where there has been an increasing emphasis on the critical role played by design management in corporate performance, but a paucity of understandings on the effective management of design outsourcing.