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Engineering services segment has been part of the IT industry for more than a decade what has changed now? What started earlier as outsourcing for cost reasons has changed. Customers are realizing that markets are now shifted to emerging markets. Product lifecycles are becoming shorter, hence time to market is short. So it’s no more about cost but adding that additional value to our customers across the segments. What has also changed is the fact that customers are talking about designing all the way up than just components. Companies that gave us IT and BPM work are giving engineering work. IT and BPM are important as it run the business but engineering is what they do. It gets us closely embedded into customer core strategy.
The engineering services industry has evolved over the last 20 years in India. Currently there are approximately 6000 engineering services organizations in the country. Over this period, customer expectations and service offerings from suppliers have changed. After the success of IT outsourcing success, we saw many companies starting outsourcing their engineering efforts for various reasons: primarily reduced cost.
The engineering services landscape in India has evolved significantly over the last few years, reflecting maturity, diversification and enhanced verticalization to partner with global corporations. The study reviews eleven major verticals in detail - Telecom, Semiconductors, Consumer Electronics, Medical Devices, Industrial Automation, Computing Systems, Automotive, Aerospace, Construction and Heavy Machinery, Energy and Infrastructure. It also reviews India’s performance across the broad range of services including embedded software and hardware design services, testing, prototyping building, engineering analysis and modeling, core product development and design services. At the product development level, strong capabilities exist in India in areas of Automotive interiors and exteriors, aero-structures and propulsion in Aerospace, access networks, core networks, devices in Telecom and development of small-medium size products in the Construction/Heavy Machinery vertical.
Many customers particularly in Automotive and other domains expect service providers to design an overall solution that is a combination of engineering and IT. Products are going the digital way underlining the need for such hybrid solutions. Called NMAX (Network, Mobility, Analytics, cloud and security and sensors), auto electronics dominate the engineering space and make the most of the existing systems. Many such solutions are currently outsourced by customers; engineering service providers can consider offering such services that combine the best of engineering and IT services.
The Indian ER&D market in 2009 is estimated at $ 8.3 billion with employee strength of 150,000, reflecting almost a threefold growth in revenues, employees and number of offshore development centers.
This is expected to grow further with the global ER&D spend surpassing $1 trillion in 2009 and expected to touch $1.4 trillion by 2020. The report estimates that India has the potential to capture $ 40-45 billion in ER&D Services by 2020.
