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Top Engineering activities delivered by Indian ER&D GCCs
Top Engineering activities delivered by Indian ER&D GCCs

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Insights in this blog are from NASSCOM-Deloitte Global Engineering R&D Pulse Survey, which spanned a survey of enterprises across North American, EMEA, and APAC regions, with participation from over 100 end user enterprises from eight key verticals across 19 countries.

 

Indian ER&D GCCs have come a long way from being an offshore centre for support to a hub for product innovation driving end-to-end ownership for global enterprises. Today India is home to over 1,430 GCCs across verticals and Engineering R&D is leading the GCC growth story of India with 55 percent market share.

As per the NASSCOM-Deloitte Global Engineering R&D Pulse Survey, 85% of the parent companies have given positive feedback on the performance of their India GCCs. More than 90 percent of the surveyed organisations plan to ramp-up or maintain their spend on their India GCCs. Companies in the ‘industrial and software products’ sectors are expected to contribute the highest to the increase in ER&D spend in India GCCs, driven by increasing focus on providing value added services and growth of key emerging technologies.

There are many ER&D activities which are already delivered by the Indian GCCs.

Pulse 6

 

Research and advanced engineering’ is seen as the key activity being migrated to India GCCs, while ‘driving innovation out of the centre’ has emerged as another principal activity. With the availability of enhanced skills and domain expertise within India, especially in software development, product management, and manufacturing engineering, activities such as ‘requirement analysis and concept development’, ‘product/technology strategy’, ‘driving innovation out of the centre,’ and ‘research and advanced engineering’ are making strong inroads into India GCCs. In the next three years, Indian GCCs are expected to take up activities such as setting up of ‘global CoEs in core/ emerging areas of business’ and ensuring ‘end-to-end module development’. ER&D GCCs in India are increasing in value by nature of work and the level of influence they have in the value chain.

Sectoral analysis –

  1. Mechanical design and engineering’ is the top activity migrated for companies in the industrial, energy, oil and gas and the automotive sectors as the products in these sectors are largely machine based.
  2. ‘Software design and engineering’ is the top priority for companies in the software products sector as companies in this sector provide software solutions requiring a large pool of software engineers.

Regional analysis –

  1. Companies with headquarters in APAC are mainly migrating regular activities, such as ‘testing and validation,’ as their India GCCs are still evolving.

Companies with headquarters in EMEA and North America are looking to migrate more complex activities around ‘driving innovation out of the centre’, ‘product/technology strategy’, and ‘software design and engineering’.

 

Pulse 7

 

Domain expertise in core engineering and digital skills in middle management and gap in availability

of ‘holistic, future-aware managers’ to fill the senior management roles is a challenge with most Indian GCCs. Data security, especially post pandemic, with work from anywhere options available, has been another challenge for Indian GCCs. In addition, the Indian market has witnessed companies offering competitive salaries and aggressively hiring from within the same talent pool. The resulting

issue of high attrition has plagued sectors and is a major challenge for knowledge retention within the ER&D departments of companies.

Sectoral challenges –

  1. For Automotive and transportation sectors, ramping up of digital engineering skills to deliver effectively to these industry trends is the most crucial challenge.
  2. For hardware and electronics, industrial, and energy, oil and gas sectors, efficient project management and control is necessary to develop new products and solutions is the need.
  3. For software products, there is need for experienced senior leaders to helm global/ product ownership roles in India GCCs.

Regional challenges -

  1. APAC – Challenges include project management and control.
  2. EMEA – Companies in EMEA plan to shift core activities to their India GCCs and hence, are concerned about ‘limited/non-availability of digital engineering skills.’
  3. North America - Expanding the availability of quality talent in India and the presence of a strong ER&D ecosystem is the top most challenge.

Companies across geographies are looking to leverage their India GCCs to deliver more activities due to the availability of key skills and talent at scale. As India is also better positioned to deliver on emerging technologies (AI/ML/IoT/ cloud, etc.), companies are opening to the possibility of even shifting many of their core activities to their India GCCs.

 

Read more insights in the report – “NASSCOM-Deloitte Global Engineering R&D Pulse Survey 2022”

NASSCOM Community - https://community.nasscom.in/communities/engineering-research-design/nasscom-deloitte-global-engineering-rd-pulse-survey-2022

NASSCOM Website - https://nasscom.in/knowledge-center/publications/nasscom-deloitte-global-engineering-rd-pulse-survey-2022


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Vandhna Babu
Principal Analyst - Research

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