CIOL:ESO needs scale to realize scope

MUMBAI: Captives vs service companies, deal sizes, sales cycles, talent crunch and pull from IT sector, after-markets and much more. Global Engineering Product Development through India is not only a billion dollar market opportunity as projected by Booz & Hamilton, but also a subject of pithy debate as witnessed at the Nasscom Leadership Forum.

Industry leaders shot and fielded many issues that face the ESO (Engineering Services Offshoring) market in India.

"ESO is an opportunity whose leadership India has to claim. Only scale will help us realise the scope that this market presents," urged Paul Branstad, senior vice president, Booz Allen Hamilton. He pointed towards C-suite relationships that are based on collaboration with customers and dedicated engagements. "For companies in ESO to grow, there would be a need for less transactional orientation and more interaction with customers.”

The issue of talent availability set these seasoned minds thinking and talking. While some denied perceptions that ESO finds a rival in the IT industry that has been weaning away critical engineering talent, Sudhakar Kolli, product and process development manager, PPD department, Caterpillar felt that it's more of an talent issue than that of headcount. "More importantly, we need to address product optimisation and cycle times from the skill pool available in ESO."

Suggestions on how to make ESO attractive to engineers vis-à-vis IT, also came up.

On another aspects, Kolli highlighted the shift from traditional 'point-based engineering' to 'set-based engineering'. "This involves virtual engineering, multiple concepts, virtual supply chain collaboration, manufacturing engineering etc. Multiple concepts can then be taken to the core team and weaved into an overall concept. ESO for India can be a $60 billion industry by 2020."

At the same time, after markets also were in spotlight as another ESO pie. B V R Mohan Reddy, CMD, Infotech Enterprises Ltd said that there is a huge opportunity in publishing and fixtures etc. the ESO horizon should be expanded across the PLC. He also cautioned that for ESOs, the ramp-up might be slower than their IT counterparts. "They would need to be particular about the criticality of identical systems and follow the same drafting and design standards as that of customers."

On the issue of physical proximity raised by an audience member, he offered solutions like robust training systems, onshore teams and patents to facilitate more knowledge transfer.

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