CAE Project? Software or Outsourcing?
One of the biggest questions in (CAE) engineering is: Product (software) or Service (outsourcing)? In other words, whether to own the software, know-how, and maintain the whole process, or whether to outsource the project to experts. In this article, I would like to discuss various scenarios when it makes sense to acquire engineering software and when it’s smart to get the project done externally.
At the company I work for, I talk to engineers daily. Most often, they come to buy software and build internal simulation know-how. After a discussion, we very often find out that going for software isn’t fully justified. Let’s take a closer look at the most important points that drive the decision process.
Car vs. Aircraft
I like the parallel with the car and the aircraft. We all travel. While owning a car is common, owning an aircraft is rare. Why? Car ownership is justified with frequent rides, instant usage, low/no entry barriers (driving license, …), and acceptable cost. Flying business is different. Aircraft ownership is associated with substantial complexity, and no wonder we (the masses) outsource our flights to experts who know what to do better than we do.
CAE engineering projects are similar. Sometimes, it’s smart to get the software, learn everything, and execute and maintain the process internally. But sometimes, it’s much more convenient to outsource the project and have it done by experts.
Software Cost vs. Total Cost of Ownership
Buying simulation software is never only about the license price. Yes, let’s say the price list asks for 20,000 EUR per year. But that’s only the beginning. Real costs are soon to come: hiring and growing simulation engineers, training, steep learning curve (time = money), maintenance & upgrades, integration with other tools and internal processes, documentation, validation, and hardware. The total cost of ownership (TCO) is often 5–10 times the initial software cost. Easily. Software is cheap. People and processes are expensive. Owning the product is maintaining know-how, and it is a long-term run. A journey. An adventure.
Owning simulation software is not about pressing a button and getting results. Owning simulation software means building know-how. It takes time, effort, mistakes, iterations, and tons of coffee. But once you fight through all that, the knowledge stays with you under your roof. Your team gets better. Stronger. Faster. Unique. More independent. This is the real asset.
Outsourcing
Outsourcing CAE projects can be a smart business decision. It gives you instant access to experts with established processes, quality control, and extensive experience, enabling you to focus on results rather than software and time rather than learning curves. Outsourcing is particularly beneficial for unique or one-time projects, projects requiring rare or specific expertise, projects with tight deadlines, or when internal capacity is overloaded or building in-house expertise is too costly or time-consuming. However, it’s critical to keep in mind the limitations of outsourcing. It doesn’t contribute to internal knowledge building and can lead to dependence on external resources.
The Critical Aspects to Consider (Questions to Ask):
Delivery Time
- How fast do I need the results?
- Do I have time to learn, test, fail, and improve?
Results Quality
- Can I realistically reach expert-level quality internally?
- Is the risk of mistakes acceptable for this project?
Total Cost of Ownership
- Am I ready to invest in licenses, people, training, hardware, and processes?
- Or is it smarter to pay for the outcome?
Human Resources
- Do we have the right people for this project?
- Can we allocate at least half of a full-time employee’s capacity in the long term?
Repeatability
- Will I run similar simulations regularly?
- Will the know-how be reusable? Or is this rare or a one-off?
Intellectual Property
- Do I want to keep things under the roof?
- Or is it okay to let an external partner handle it?
Long-term Value
- Where is my added value? Am I increasing it with software?
- Or is this project just a support activity?
Typical Signs that a Company Should Consider Owning Simulation Software
- Recurring Projects with Similar Simulation Workflows: When a company consistently undertakes projects that require similar simulation processes, owning the software allows for streamlined workflows and eliminates the need for repetitive setup and configuration.
- Importance of Long-Term Internal Know-How Building and IP Security: Simulation software often involves a steep learning curve. Owning the software encourages internal expertise development, leading to greater efficiency and innovation over time and keeping know-how under the roof.
- Simulation as Part of the Product Development Process: If simulation is integral to product design and development, owning the software ensures that it is readily available and can be customized to meet specific needs.
- Tight Coupling Between Simulation and Design Optimization: When simulation results directly inform design decisions, having immediate access to the software facilitates rapid iteration and optimization.
- Need for Quick Iterations Without External Dependency: Reliance on external providers for simulation can lead to delays. Owning the software allows for quick turnaround times and greater control over the simulation process.
Example Case: Pump Manufacturers who use extensive simulation and analysis to optimize pump design and efficiency.
Typical Signs That a Simulation Project is Ideal for Outsourcing:
- One-Off Project: The project is a singular occurrence with no anticipated future iterations or similar analyses.
- Lack of an Internal Simulation Team: Your organization doesn’t have a dedicated team for simulation tasks, and there are no plans to establish one.
- Highly Specialized or Complex Simulation: The simulation requirements go beyond standard computational fluid dynamics (CFD) or finite element analysis (FEA), demanding specialized expertise.
- Extremely Tight Deadline: The project timeline is very compressed, leaving insufficient time to develop an internal workflow or solution.
- Cost, Speed, and Risk Considerations: Outsourcing proves to be more cost-effective and faster and carries lower risks compared to handling it in-house.
- Example Case: Consider a scenario of a one-time acoustic analysis of three product candidates. In this case, outsourcing the simulation is a clear and advantageous choice.
Semi-Final Thought: Beware of One-Size-Fits-All Advice
Be careful with marketers or salespeople who promote a single (their) solution for all situations. Every project is unique and requires a tailored approach. Real engineering involves context, experience, and intelligent decision-making. In real engineering practice, there are no shortcuts. It’s either owning the process and mastering it or, better, outsourcing the project. Anything in between usually has the disadvantages of both worlds.
Final Thought
The best approach will always depend on project-specific circumstances and goals. If simulation is a core element of your business, consider owning the software and developing in-house expertise as a long-term strategy. This gives you better control, edge, value, and integration with your existing workflows.
However, if simulation isn’t close to your core business, outsourcing to a specialized simulation provider would be more efficient and cost-effective. This allows you to leverage their expertise, resources, and experience without a large investment.
In summary, the decision between owning and outsourcing simulation software depends on your specific needs and priorities. Carefully evaluate all the aspects above and make the best choice for your business. That’s all that matters after all.