The global engineering services outsourcing .pdf
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The global engineering services outsourcing (ESO) market is growing, as organizations seek costsaving opportunities. The constant increase in cost reduction and increasing demand for fast delivery
of products and services are some of the factors, driving the growth of the global engineering services
outsourcing market. The increased global competition has increased the need for cost reduction,
among companies across several industries. As technological advancements are significantly
decreasing lifecycles of products, the clients are progressively demanding faster delivery of services.
The market trend of companies outsourcing engineering services is expected to grow in the coming
years, as offshore options are increasing particularly in India for supporting cost-cutting efforts.
Several factors, such as enhancement in efficiency and improvement in processes are further driving
the growth of the global market.
Outsourcing several non-physical engineering tasks or engineering services, such as simulation,
designing, and consultation, to specialized vendors or engineering service providers is known as
engineering services outsourcing. ESO drives innovation, as it involves higher level of functionality
within the company and is strategic to the company’s value proposition. The companies reliant on
manufacturing and engineering require predicting needs and preparing for opportunities, which they
may not be able to address on their own. By partnering with an engineering service outsourcing
vendor, the organizations encounter vast opportunities. The global engineering services
outsourcing market is expected to grow, as companies are augmenting their capabilities with
resources provided by information technology firms specializing in engineering design, instead of
using exclusive in-house assets.
The consumer electronics segment is estimated to observe the fastest growth during the forecast
period, due to significant reduction in product life cycles, which forces companies to bring about
product innovations at a swift rate. The end-use industries, such as aerospace and semiconductor
electronics exhibit high growth opportunities, due to low penetration rate in these sectors. The
administrations are benefitted from engineering services outsourcing, as they can focus on more
important matters, such as executive management decisions. The need to focus on critical research
and development (R&D) activities has forced the automotive and aerospace original equipment
manufacturers (OEMs) to increase their tie-ups and associations with service outsourcing vendors,
owing to fixed budgets. The ESO vendors provide various civil and construction engineering services,
such as building information modeling, computer aided design (CAD), structural designing, and
project management. The changing consumer preferences, along with increased competition have
forced companies to continuously develop and innovate new products at a faster pace.
The major challenges in the global engineering service outsourcing market include lack of domain
expertise among workers or companies, poor infrastructure development, and poor regulatory
support. Asia-Pacific dominated the global market of engineering services outsourcing in 2014,
followed by Europe. The emerging local outsourcing demand, strong manufacturing base, and cost
arbitrage in developing countries, such as China and India are the major growth drivers of the AsiaPacific engineering services outsourcing market. Infosys Limited, Mindfire Solutions, Sonata Software
Limited, Tata Consultancy Services Limited, EPAM Systems Inc., KPIT Technologies Ltd., Aricent
Inc., ALTEN Calsoft Labs are some of the competitors in the global engineering services outsourcing
market. HCL has utilized its specialized knowledge and product-focused background in IT, to become
the largest engineering services outsourcing vendor in India.