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Engineering services banks on global clients

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CIOL Bureau
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MUMBAI, INDIA: It’s over a decade, since many tech companies ventured into engineering services segment. However, in such a short time, these companies have done a commendable job in providing top quality and precision-based engineering services.

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Interestingly, these companies have been successful in leveraging their IT knowledge and skills to offer top class services to diverse verticals in the engineering field which include automotive, aerospace, telecommunication, semiconductors, consumer electronics, etc.

Following the IT industry’s path of foreign clients and outsourcing, these engineering services firms also, at large serve overseas clients and earn good revenues.

In fact, more than 90-95 percent customers are from the US, Europe and other foreign regions. This high percentage does signify, how these firms with their value services have been successful in establishing themselves at global level.

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“We have about 50 clients and 95 per cent of them are global clients, which are from aerospace, defense, hi-tech, electronics, automotive and consumer products. And less than 5 per cent clients are from India,” says Karthikeyan Natarajan, vice president and global head – Mahindra Satyam Integrated Engineering Solutions (IES).

Similarly, L&T Integrated Engineering Services (IES) has about 140 clients, of which 70 per cent are from outside India. It earns less than 4 per cent revenues from services provided to the parent company, Larsen and Toubro (L&T).

“With our services and solutions for product design, analysis, prototyping and testing, embedded system design, industrial product design, etc., we cater to large global customers and about 97 per cent revenues come from the global clients,” says Dr. Keshab Panda, CEO, L&T IES.

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According to Dr. Panda, the L&T brand is well know in India but the challenge of making it global can be overcome by managing the global customers and providing services with values.

“We are focusing on aerospace, defense, ship designs and also we provide simulation solutions to OEMs for component behavior and analysis and other engineering services. We are leveraging our engineering strength to offer our integrated services and solutions,” adds Dr. Panda.

With global economic situation, many experts strongly view that outsourcing or offshore engineering services is expected to grow more and is likely to do, what IT has done for India.

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“Today, customers are looking for emerging economies, plus there’s the pressure of lowering cost on R&D, testing and analysis for new products and its lifecycle management. Hence, they are looking at companies which can provide market access and capability as key drivers for growth,” comments Natrajan.

Moreover, he points out that demand for engineering services within India is still at nascent stage and needs a lot of industry engagement and awareness.

“Defense is likely to be the key driver in India and in next five years the engineering services sector will witness further growth,” opines Natarajan.