This article looks at the scenario of the Indian engineering services and explains the advantage that India has in this business space. A SWOT analysis is carried out to enable a deeper understanding of this sector. The article also attempts a projection into the future based on the opinions of leaders in this industry and provides a few pointers/key insights based on the same.

Engineering Services Outsourcing (ESO) is totally different from the other types of outsourcing that we are familiar with in the software space. In the case of conventional BPO or IT outsourcing, a strong domain expertise among the personnel is not required; whereas, it is very much a prerequisite in the case of ESO. For a long time, companies did not think of or rather it was beyond the realm of thought to outsource the non-core part of the product design. It was only in the late 1990s that companies in the West began outsourcing a variety of activities which are normally done before a product design is ready for launch. It must also be remembered that around 20-30% of activities that are to be done during product design are non-core activities. These activities can be outsourced if their management is effectively administered.

Having started around the year 2000, ESO is a very new segment in the domain of the Indian IT and allied businesses. It has been able to attain a compound annual growth rate of around 45%. Engineering services can be defined as those that support processes associated with the design of a product or service. They would also include services which could increase the life or optimize the yield of products. Design of infrastructure, process or equipment needed to manufacture a product would also qualify as engineering services.

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