Made-in-India' not a faraway tree

While it is arable and worth a $40 billion market by 2020, as predicted by Nasscom, there are many furrows like customer-interface, ecosystem and complex spectrums that need to be navigated

How easy is cruising all these and would ESO finally print that elusive Made-in-India tag? Prasad Shetye, vice president and head, Engineering Services, Patni, shares the ESO traction so far in this chat with Pratima Harigunani from CyberMedia News

ESO is definitely not the same cake as IT. How does an offshore service provider tackle the issue of critical customer interface required in various aspects of design and engineering while being miles away? What is the cost of iteration and lack of physical proximity?

Yes, interactions with customer and various departments are critical in ESO. Around 10 to 15 per cent of our ESO team is onsite. We operate under two models. One is where our team goes to the client’s site for knowledge transition to study all aspects of the Product Life Cycle (PLC) and interact with various departments. They come back and then share with offshore members and start the project. In the second model, a lot of action is located at the client side that incorporates different departments. Our team stays there as the face of Patni. Interface varies depending on the kind of project, client’s expectations and wish. For instance, for a marine engineering customer, we deputed two full-time engineers onshore. Initial interactions are an imperative but other issues get ironed over a period of time. Rest is handled through a system of metrics, deliverables et cetera discussed iteratively through webinars and conferences.

What percentage of the ESO business is due to India’s time zone and cost arbitrage advantages?

When it comes to pure-production related jobs where the customer needs a next-rung piece to be done by the time he gets up the next morning, yes, ESO taps on the Follow-the-Sun model. But there’s also a lot of slice on innovative work where Indian R&D teams are striking it big.

What is your take on the ongoing tussle between point-based engineering and set-based engineering from the perspective of ESO? What is better, the traditional system of converging on a point in the solution space, and then modifying that solution until it meets the design objectives or going the set-based way of broadly considering sets of possible solutions and gradually narrowing the set of possibilities to converge on a final solution?

Well, both have their own advantages and disadvantages. There has been a lot of debate about this and everyone has his own opinions. I would refrain from commenting much except that many facts are still unknown. We hope that something concrete would come out in the next few months.

Are scale and ecosystem serious issues in ESO for India?

They are challenging but not to a major extent. They can be approached systematically. Every challenge has a way of resolution too. For instance, Patni has enough experience on ecosystem side due to its IT and BPO background that came handy.

Which geographies are hot for ESO now?

For Patni, US is a big market and even Europe is showing greater strength. We added Japan a few years back and it is also an exciting market due to the speed of innovation.

Is Japan more demanding, given its tech-prowess?

They are no doubt, illustrious for their tech-edge but ESO is ripe on account of need for support, T2M (Time to Market), execution perspective. Japanese have very fixed processes and Patni is also strong on that area which has resulted in long-lasting relationships.

So, at what chronometer or value-chain reading, do you exactly crack a long-term ESO customer?

It differs from customer to customer and project to project. For example, a customer in pump manufacturing initiated work for a design piece when it needed some migratory work for a new platform. Six months down the line, we were working on efficiency of pumps, is a much broader area. Many projects start with smaller assignments, be it the contract period or nature of complexity on the value chain. It could be just at the concept level and depending upon customer’s strategy and market, the possibilities are limitless.

What is Patni’s spectrum on ESO?

At Patni, the ESO Center of Excellence (CoE) is a part of Product Engineering SBU. We span across the product development cycle, starting from concept building to product realization. Vertical gamut includes Automotive, Heavy Engineering, High-tech, Consumer Electronics, Industrial Automation, Medical Electronics etc. Services range from gathering functional requirements, translating them to alternative designs and arriving at optimum design through engineering analysis process. Besides that we have mechanical CAD/CAE/PDM services and embedded technology solutions too.

What has been the growth on business so far?

The Product Engineering Services (PES) business has seen a year on year growth of 73 per cent (FY06 v/s FY05). Patni’s PES vertical contributed 10.1 per cent to Patni’s overall revenues in FY06 as compared to 7.5 per cent in FY05. We were recently ranked as the ‘Global leader in Engineering Services’ in a survey conducted by Global Services Magazine and corporate consultancy firm, neoIT.

Anything on Aerospace or plant automation?

Not so far, but would embark on the same depending on the strategy and requirements of PES, under which the ESO CoE of Patni operates.

Do you think that India would be able to tap the $40 billion ESO market by 2020 as predicted by Nasscom and Booz Allen Hamilton?

The research looks very thorough, insightful and realistic. I think $40 billion is a reasonable market figure. Though some challenges on infrastructure, manpower and talent availability stay to be addressed before we realize the market. At Patni, we are all charged and gearing up to tap this market.

So, is the day near when the world will look up to the ‘Made-in-India’ tag?

Yes the trend is moving towards that if you look back at the last four-five years. I am very positive on that. It will take time to get etched on the international map but big things are happening here and India is contributing a lot. By 2020, we will certainly see a different picture.

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