By Neelam Singh
Engineering Services (ES) augment and enhance the limited technical talent available in developed and developing countries to reduce costs, improve quality, create new products, and build infrastructure with increased value and shorter time-to-market. In most developed countries, there is a shortage of graduates in the sciences, technology, engineering and math (STEM), and the primary value of Engineering Services is realized through providing these resources. A secondary benefit involves the savings in terms of less time and money spent. Engineering Services are a strategic activity and a competitive necessity for the adopters. Schools in India graduate a huge number of STEM trained people, and it has become the leading destination for those needing Engineering Services. That is the reason, India is a preferred destination for outsourcing Engineering Services.
ARC Advisory Group has witnessed that Global Service Providers (GSPs) in India have expanded their capabilities and focus on variety of use cases in areas of interconnectivity of products and plants, working in disrupted environment with new partner ecosystem to stay relevant, leveraging technologies such as Internet of Things (IoT), Engineering Analytics, 3D Printing, Artificial Intelligence, Machine learning, and Innovative Platforms to build intelligent, agile, differentiated, and smart ecosystem.
In recent years, GSPs have been considered for more strategic roles like co-innovation and joint development projects, which are based on a risk sharing model. Industry-wise Automotive, Aerospace, Machinery Manufacturing, Electronics and Electrical, Telecommunications and Semiconductors are the fastest growing verticals for the Engineering Services industry.
Owing to the maturity of services, especially the IoT services, the service industry in India is poised for transformation. Many suppliers have built specific capabilities around IoT which is being received well by end-user community.
Some key trends for the growth of Engineering Services providers are:
• Ability to Handle Critical Functions
Engineering Services is moving from low-level engineering functions, basically non-critical in nature to more critical and innovation-centric Engineering Services. The steady engineering services movement in aerospace, automotive sectors, and defense is proving the change.
• IoT Becomes Significant
Among other emerging technologies and improvisation on the existing ones, IoT is one of the most talked about technologies that can help enterprises raise the productivity and efficiency to a different level. With a focus on driving more value, enterprises are emphasizing more on leveraging IoT in their business processes. With the maturity and the scope of IoT, the service industry in India is poised for transformation.
• Manufacturing Gaining Centre Stage Across Geographies
There are various initiatives that different governments have adopted to drive innovation in manufacturing. Manufacturing and R&D are growth engines for any economy because an innovation driven economy is more resilient to crisis and can recover faster. Industrie 4.0, Smart Manufacturing Leadership Coalition (SMLC), Industrial Internet Consortium (IIC), Horizon 2020, Make in India are some of the example of initiatives which can open up more opportunities for everyone in the ecosystem.
Engineering service suppliers in India also face significant issues related to the changing outsourcing requirements and patterns of their global customers. For a detailed understanding of key trends in Engineering Services, ARC Advisory Group has recently published a new research report on Engineering Services ((http://www.arcweb.com/market-studies) which is focused on suppliers of Engineering Services. In addition to in-depth research into the Engineering Services market and suppliers in India, this study attempts to answer key questions:
• Which strategies can help suppliers increase their value proposition?
• How can the GSPs adopt new business models without being concerned about the IP?
• Which suppliers are growing particularly fast? How is their growth changing the market dynamics?
• Which industries are the main buyers of Engineering Services? How has that changed in recent years?
• What are the key trends in the Engineering Services market?
• What are some of the contributing and inhibiting factors?
About ARC Advisory Group: Founded in 1986, ARC Advisory Group is a Boston based leading technology research and advisory firm for industry and infrastructure.
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