Engineering services outsourcing_unraveling myths

Engineering Services
Outsourcing
Unraveling Myths
June 2014

Table of Contents
Abstract 3
Global R&D Spending and ComposiƟon 4
EvoluƟon of the ESO Industry 5
Perceived Barriers and RealiƟes 6
Which engineering funcƟons can be outsourced? 7
ESO Levers for Business Impact 8
Type of ESO Engagements: Business Models & RelaƟonship 9
ESO ProposiƟons by Product Porƞolio 12
Summary 15

Abstract
TradiƟonally, in a product centric world, R&D has always been perceived as intellectual property and hence
treated with utmost confidenƟality. There was no room for collaboraƟve or complementary R&D.
However, of late, there is a shiŌ away from products alone, to an ecosystem of services around the product
focusing on end user experience. There is need for development of the product, associated plaƞorms, and
industry and geo specific variants for companies to go to market. Global compeƟƟon and reducing product
lifecycles are forcing companies to leverage their value chains to retain market share.
Cost and labor arbitrage are no longer the primary drivers and many engineering engagements are being recast as
win-win partnerships to leverage collaboraƟve growth opportuniƟes. Many OEMs and ISVs are collaboraƟng with
engineering service providers to accelerate Ɵme to market, extend product lifecycles, develop plaƞorms, enter
emerging and adjacent markets, and opƟmize R&D operaƟons.
© 2014, HCL Technologies. Reproduction Prohibited. This document is protected under Copyright by the Author, all rights reserved.

Global R&D Spending and Composition
The engineering services spend by industry verƟcal
has been led by the automoƟve sector, which
accounts for a quarter (26%) of the global spend.
This is due to automoƟve OEMs and suppliers
being driven by the conƟnuous need for superior
performance, safety, reliability, convergence, and
fuel economy. Consumer electronics and telecom-munica
Ɵons firms seeking shorter product
lifecycles and technology innovaƟon are the next
largest spenders on Engineering Research &
Development(ER&D). The proporƟon of spend on
ER&D by verƟcals is expected to remain stable Ɵll
the end of this decade.
In terms of geography splits, the US dominates
with two-thirds of the global ER&D spend, and with
the resurgent economic scenario, it is expected to
grow impressively in absolute terms. Japan, with
27% of the share is the second highest spender,
though growth has been halted by the slowdown in
2008-09. The third highest spender is Europe, in
which Germany remains the largest, and perhaps
the only one showing consistent growth. France,
United Kingdom, Italy, The Netherlands, and
Sweden consƟtute the other major spenders in
Europe.

The Outsourced R&D Market Size & India’s Share
According to NASSCOM, the enterprise outsourced
R&D market in 2013-14 is around $75B, with the
US, Japan and Germany being the top three
markets. India’s share of the Engineering Services
Outsourcing (ESO) industry can be esƟmated to be
around 16-17% in 2013-14, and it competes with
countries like the US, France, and Germany for
onshore delivery and Mexico, China, Eastern
Europe, Vietnam, and Philippines for offshore
delivery. NASSCOM esƟmates that India will
capture 35-40% share of the global market by
2020.
Evolution of the ESO Industry
For over three decades, Original Equipment
Manufacturers (OEMs) and Independent SoŌware
Vendors (ISVs) have leveraged Engineering Service
Providers (ESPs) for tacƟcal engineering support by
using staff augmentaƟon models for cost and labor
arbitrage. Given the plethora of technologies used
across hardware and soŌware, it was easier for
customers to get access to the global talent pool by
using ESPs to provide scale whenever and wherever
needed. Project execuƟon was limited to basic
acƟviƟes like scanning and digiƟzing of engineering
drawings to engineering change order
management. Product engineering was considered to
be a core acƟvity and IP-centric and therefore off
limits for outsourcing.
Post 2003, capacity augmentaƟon came to the fore
and customers required ESPs to help them reduce
their Ɵme to market and scale only when there were
requirements. This helped them accelerate their
product development process and manage opera-
Ɵonal expenditure. AŌer 2010, access to emerging
markets also acquired importance for customers as
consumer spending rose in these markets.
Today’s businesses, driven by cost reducƟon and
product lifecycle pressures, are increasingly focused
on developing effecƟve outsourcing strategies that
drive significant improvement in global engineering
and R&D operaƟons. Of late, the engineering services
outsourcing market has witnessed substanƟal growth,
and has evolved to encompass a broad range of new
product development, value engineering and product
support funcƟons. Gradually, the future growth of
ESPs will lie in how well they are able to drive product
innovaƟon for customers and put their skin in the
game by sharing investments.

Perceived Barriers and Realities
Barrier 1 – Fear of lack of control over product
development
Most companies are quite cagey when it comes to
their R&D work and do not show willingness to
disclose details of their next generaƟon products
and soluƟons for the fear of plagiarism in this
Internet era. This leads to a fear of outsourcing
parts of work which are related to product devel-opment.
Reality
If the onion is peeled, it can be realized that there
are mulƟple aspects of engineering which can be
complementary and hence, not so confidenƟal.
Typical product development cycles are quite
elaborate with detailed processes, majority of
which are domain neutral. Over 70% of the engi-neering
effort is on acƟviƟes which are domain
neutral while only 30% of the effort is on differenƟ-
ated domain centric feature funcƟonality.
Barrier 2 – Products that are created by third
party vendors will not adhere to quality stan-dards
It is believed that when outsourcing is performed,
there is a loss in complete control over labor and
process, which results in lower quality products.
When interacƟon is not done directly with people
making your products, they may be less loyal to the
company and have a reduced incenƟve to produce
good work at a reasonable pace.
Reality
ESPs, as much as the outsourcers themselves, have
an incenƟve to focus on quality. There is a conƟnu-ous
effort on the part of ESPs to create organizaƟon
management systems which define comprehensive
processes to ensure that high quality is delivered at
all stages for any engagement. ESPs are also compli-ant
to ITIL, ISO, and CMMI and consider these as
standard processes which have to be rolled out
mandatorily for customers.
Barrier 3 – Geo-poliƟcal reasons
The geo-poliƟcal barriers that are perceived include
cultural barriers, physical distance, Ɵme difference,
and poliƟcal instability. SomeƟmes, there is a lack of
comfort level while dealing with a person who is
accustomed to a different cultural environment. For
example, when an American is providing require-ments
to an Indian, the Indian does not having
enough confidence to say that a certain require-ment
cannot be implemented due to architectural
challenges. There are also instances where resolu-
Ɵon to a problem gets delayed due to the ESP
working in a different Ɵme zone.
Reality
It is true that cultures are different in different
countries, but outsourcing has evolved over a
period of Ɵme and there are defined processes

which ensure that these barriers can be overcome
easily. Cross-cultural training programs are under-taken
by ESPs to ensure that at an early stage
employees are comfortable dealing with customers
from different parts of the world. Also, ESPs set up
delivery centers at both offshore, nearshore and
onshore locaƟons which provide support to
customers 24*7. When it comes to poliƟcal insta-bility,
ESPs help protect clients by building clauses
in the contract to manage it.
research and analysis, change management, tool
selecƟon etc. are possible outsourcing candidates,
but based on the situaƟon at hand. AcƟviƟes like IP
management, technology planning, strategic
planning, and architecture design can be retained
as they are core acƟviƟes and therefore do not
have to be outsourced.
Which engineering functions
can be outsourced?
There is a lot of consulƟng around idenƟficaƟon of Core
vs Context in terms of acƟviƟes which are undifferenƟ-
ated and hence, which can be outsourced. Proper
planning in terms of arriving at the scope of work for
effecƟve outsourcing can help companies drive signifi-cant
improvement in global engineering and R&D
operaƟons and allow them to focus on their key differ-en
Ɵators and retain their market share and compeƟƟve
advantage.
The graph shown here illustrates the possibility of
outsourcing a certain engineering funcƟon. It is clear
that within a product development lifecycle, acƟviƟes
like soŌware development, tesƟng,manufacturing
support etc. are strong candidates for outsourcing as
the complexity of interacƟon is not high. As one moves
higher up the value chain, in the technology develop-ment
area, acƟviƟes like

ESO Levers for Business Impact
Companies are increasingly turning to outsourcing
as a strategy to improve their global ER&D opera-
Ɵons. The key levers and growth drivers include the
following:
Cost: Over the years, the R&D intensity in terms of
R&D spend as a percentage of sales has been
constantly reducing. The shrinking R&D budgets
have led to companies looking to expand their
footprint in Low Cost Countries (LCCs) through
partnerships with ESPs or through the establish-ment
of capƟve centers to leverage the cost differ-en
Ɵal in engineering effort. Typical engagement is
either through Time & Material or Fixed Bid type of
project execuƟon.
Labor: Given the complexiƟes of the technologies
involved in end to end product engineering, it is
quite difficult to get a flexible pool of engineers
with the relevant capabiliƟes and competencies.
Access to a global talent pool can go a long way in
providing scale to ER&D operaƟons.
Time: The free flow of real Ɵme informaƟon across
geographies and markets thanks to the Internet has
resulted in shortened product lifecycles and release
cycles. Companies need to be constantly on their
toes to be ahead of the curve, or else they will end
up losing market share. In the Online industry,
there are some products which have become
obsolete even before going to market. Service
providers who are able to provide ready-to-use
components, frameworks and methodologies to
accelerate Ɵme to market are much sought aŌer.
Technology: Another key factor is the quantum of
technological convergence across varied verƟcals
thanks to the advent of disrupƟve technologies like
Mobility and Smart Products which are driving
customers to a more connected world. ESPs with a
footprint across industry segments are in a beƩer
posiƟon to adopt best pracƟces and technologies
from hitherto unrelated industries.
Revenue: The shortening product lifecycles ensure
that companies do not have the luxury of addressing
markets in a phased manner as global compeƟƟon
might quickly enter white space market segments.
Access to global markets with an ability to address
emerging and adjacent markets in simultaneous
launches will ensure maximizaƟon of revenue as well
as market share retenƟon. Partnership with global
service providers with a large geo spread and foot-print
across mulƟple markets, currencies and
languages can help manage this risk.
Ecosystem: The world is becoming more of a
connected world with consumers expecƟng a seam-less
experience more than devices with advanced
features and funcƟonaliƟes. OEMs need to ensure
that there is a plaƞorm around the product which
integrates the services around the product to provide
a phenomenal experience. ISVs on the other hand
need to ensure that their services are easily
consumed by mulƟple devices with different form
factors and consumed in different manners (touch,
voice, video etc.). All of this has increased the impor-tance
of embedded soŌware as a means to merge
the device with the applicaƟon to provide a seamless
experience.

Types of ESO Engagements: Business Models & Relationship
TacƟcal ESO Engagement – Project Centric
Most companies prefer to begin engineering services
outsourcing iniƟaƟves with a project-centric engage-ment.
Mostly, such projects are specific to a parƟcu-lar
release of a parƟcular project. A typical project
could include some of the following:
VerificaƟon & validaƟon and release manage-ment
of a parƟcular release
New product development of a parƟcular
version of a product/sub assembly
Proof of Concept to test out adopƟon of a new
technology/feature set
Support and sustenance of a parƟcular product
The business model of the engagement is either on a
staff augmentaƟon model where the ESP provides
engineers with the relevant competencies while the
outsourcer is responsible for project and program
management, or, on a Ɵme and material model
where the ESP handles project and program man-agement
along with the engineering work with
associated rate cards for the effort involved (rates
differ based on the role and experience level of the
engineers). In both these cases, companies prefer to
scruƟnize the engineers involved themselves in
terms of their capabiliƟes.
In a few cases, companies also outsource projects
on a fixed bid model where the ESP is completely
responsible for the deliverables of the project with
complete ownership on the resource mix of the
project team.
Typically, engineering services conƟnue to be
delivered primarily through hourly, daily, weekly or
monthly rate-based pricing models, staff augmen-ta
Ɵon relaƟonships or Ɵme and material (T&M)
projects of various forms. These less mature
resource-based pricing models reflect the conser-va
Ɵve nature of the client base; specifically, the
lack of sourcing maturity within the engineering
services community.
However, of late, buyers of engineering services
are shiŌing towards more mature and advanced
sourcing relaƟonships that provide more
predictable, stable, and higher quality of services
and deliver the anƟcipated and contracted value to
them. Chances of product success are higher if the
service providers also have financial incenƟves to
achieve business outcomes and hit target service
levels and performance metrics.
We will now look at the various engineering
services outsourcing engagements in detail:

While this is a good model to start with, it gets quite
detrimental if the company does not migrate to more
mature engagements with their long standing ESPs.
This is primarily because of the addiƟonal overheads
of commercial negoƟaƟons and project oversight for
every project. Companies need to compute the total
cost of outsourcing including the oŌen neglected
travel overheads of their execuƟves to arrive at a
proper cost benefit analysis.
TacƟcal ESO Engagement – Procurement Centric
Once they have tasted iniƟal success with their
engineering services provider, most companies
migrate to a procurement centric Offshore Develop-ment
Center model. Over here, procurement aggre-gates
the resource requirements across mulƟple
departments and divisions and arrives at a commer-cial
model for engineering effort. (Ɵme & material
rate cards basis the tech competency, role and
experience of engineers). Given the volumes
involved, procurement can work with ESP’s to obtain
volume based discounts. As a result, the company
now has a dedicated pool of engineers who are
competent on the technologies relevant to them.
AŌer execuƟng a few projects, the engineers become
familiar with the tools and engineering processes of
the customer as well. In many cases, an ODC is
treated as an extended R&D arm of the company.
One big advantage for Engineering and R&D teams in
this model is that the decision of choosing the right
ESP and negoƟaƟng the rate cards etc. is taken out of
the equaƟon. They just need to define the scope of
work with the preferred ESP and get an esƟmate
(with assumpƟons) on the effort involved for a given
project. Once the effort esƟmate is approved on both
sides, the project is quickly executed by the dedi-cated
pool of engineers. This process is repeated for
different departments and steering commiƩees of
execuƟves on both sides oversee the allocaƟon of
the engineers to different projects. This commiƩee
meets on a quarterly basis and takes strategic deci-sions
like increasing or decreasing the pool of avail-able
engineers, invesƟng on specific tech trainings,
tools, labs etc.
Again like the previous model, one needs to audit the
total cost of outsourcing by evaluaƟng hidden costs
of execuƟve travel (internaƟonal travel in most cases)
vis-à-vis Ɵme spent on negoƟaƟons over rate etc.
Most successful long term engagements are those
where companies treat the ESP as an equal partner
with an atmosphere of trust and transparency. Top
down, customer-vendor relaƟonships (a.k.a manufac-turing)
tend to be skewed, and hence they do not last
long and eventually fail.
Companies which prefer staffing centric engage-ments
tend to culƟvate mulƟple ESPs as a hedging
tacƟc. This is to ensure that they get the relevant
engineers with the relevant competencies from as
many ESPs as possible. This can get detrimental in
terms of vendor management when they migrate to
more mature models of engineering services
outsourcing.
Strategic ESO Engagement – PDLC Centric
A strategic engineering services outsourcing engage-ment
is one that is truly aligned to the business
needs of the customer. Rather than focusing on the
technology competencies and capabiliƟes alone, one

also needs to align with the business pain points or hot buƩons of the product manager.
This is dependent on the stage of development of the given product (Product Development Life Cycle stage or
PDLC stage). Here we elaborate it further in terms of the stages:
At the introducƟon stage of a product, it is all
about “Time to Market”. Services which can
“Accelerate” Ɵme to market are what maƩer the
most. AcceleraƟon services from the ESP in this
area include competencies at scale, end to end
product engineering, test automaƟon, release
management etc.
In the growth phase, suddenly the number of
customers grows exponenƟally from the introduc-
Ɵon phase. One is no longer able to provide the
kind of aƩenƟon one used to shower on the early
adopters in terms of new feature addiƟon, defect
fixes, customizaƟon etc. Here, the presence of a
plaƞorm can go a long way in providing uniformity
of services to the exponenƟally growing user base.
Hence projects around plaƞorm engineering
development can act a strong foundaƟon for the
growth of the product.
In the maturity phase, the product has a large
customer base comprising of risk averse and
mature customers. CSAT becomes extremely
criƟcal as any defect or issue can result in a huge
backlash. For example, all of us remember airline
mishaps despite air sƟll being a far safer mode of
transport than rail or road. Ideal engineering
services outsourcing projects in this stage would
be independent verificaƟon & validaƟon, product
cerƟficaƟon & compliance, managed services for
product support etc.
In the decline phase, one tries to shore up
revenues for the product by focusing on emerging
markets and adjacent markets. One also tries to
squeeze out profits by cuƫng cost, and raƟonaliz-ing
processes. The project candidates at this stage
include value engineering, should cosƟng for
emerging markets, customizaƟons for adjacent
markets, BOM opƟmizaƟon etc.
In the last (End of Life) stage, the primary objec-
Ɵve is to extend the life of the product. One can
look at integrated sustenance and support
projects to combine teams and resolve high
volume defects as part of minor releases to
opƟmize operaƟonal costs.
In addiƟon to these projects, technology adopƟon
of disrupƟve technologies should happen at any
stage of the PDLC, as these technologies can make
a product obsolete, irrespecƟve of the stage of the
product. Can we think of a refrigerator which is
not frost free? Or a smartphone with no touch
feature?

ESO propositions by product portfolio
Based on the product porƞolio of a customer and the stage at which they lie in the product development
lifecycle, ESPs can create specific proposiƟons as detailed below.
Strategic ESO Engagement – End of Lifecycle
Support
Most OEMs and ISVs, over a period of Ɵme, develop
or acquire a fairly complex set of products in their
porƞolio. As per the BCG matrix, around 20–30% of
these products are ‘Dogs’, and are at the fag-end of
their lifecycle and about to be wound up. However,
due to historic reasons like powerful customers,
strong niche markets and organizaƟonal dynamics,
they end up supporƟng these products with expensive
resources including Subject MaƩer Experts (SMEs).
Technology-centric organizaƟons also end up acquir-ing
mulƟple startups to bootstrap their products with
latest technologies. Unfortunately, these acquisiƟons
come with their own set of products which have to
be reƟred smoothly while ensuring that the key
SMEs end up working on the next generaƟon
product porƞolio. Typically, these products contrib-ute
around 15–25% of the product revenues while
consuming 25-30% of the R&D spend (most
customers have given the feedback that their
product audit results are preƩy revealing as quite a
few products are bleeding). Even organizaƟons that
are fairly mature in terms of engineering services
outsourcing end up having a blanket outsourcing
strategy across products and departments. Hence,
even end of lifecycle products get outsourced to the
tune of say 30-50% only.

Ideally, the quantum of outsourcing should be the
maximum for Dogs as they are no longer strategic to
the organizaƟon. Such products are ideal candidates
for outsourcing of end-to-end product engineering
(over 80% of outsourcing). ESPs can easily help bring
down the R&D spend on such products by 25-50%
with a planned strategy. ESPs can focus on integraƟng
the sustenance and support teams and manage these
acƟviƟes through a ‘Managed Service’ mode. Focus
on high volume Ɵckets in minor releases can ensure
opƟmized operaƟonal costs while extending the life
of the product. If properly mapped, one can easily
ensure savings up to the tune of 7-8% of the overall
R&D spend of an organizaƟon resulƟng in mulƟ-
million dollar savings.AlternaƟvely, companies can
also have a risk reward sharing model with the ESP
wherein rewards in terms of savings from the Annual
Maintenance Contract (AMC) revenues can be jointly
shared. This provides further monetary incenƟve for
the ESP to manage the integrated sustenance and
support in an efficient manner within the AMC
revenue of the product and ensure product lifecycle
extensions.
More importantly, end users typically tend to get
quite annoyed with the stoppage of support and
invariably switch to compeƟƟon resulƟng in loss of
future revenue streams. Ensuring that the product is
kept alive with minor releases ensures that end users
can migrate to the next generaƟon products at a Ɵme
of their convenience.
HCL Case Study
HCL created a well-established governance model to
manage the program and assumed product manage-ment
ownership. We also created specific teams
which were focused on driving value and innovaƟon
to assist the customer. In the process, HCL was able to
reduce the install Ɵme by 150% for a parƟcular
acƟvity through a parallel install mechanism. We also
reduced the requirement of 3rd party tools for traffic
generaƟon, lowered the build creaƟon Ɵme, and
reduced the cycle Ɵme through test script opƟmiza-
Ɵon.
Strategic ESO Engagement – Industrialized
Engineering
If one were to analyze the product porƞolio of any
OEM or ISV, the ‘Stars’ and ‘Cash Cows’ typically
contribute 60-85% of the overall revenues while
consuming 50-70% of the R&D spend. These are the
key product lines of the organizaƟon and garner all
the aƩenƟon and focus of execuƟves. However, while
they may be important, there are sƟll some horizon-tal
aspects of the product and plaƞorm engineering
which can be outsourced without reducing the
importance of these product lines.
Ideally, these products are apt candidates for opera-
Ɵonal efficiency and effecƟveness as they are anyway
bulk of the operaƟonal R&D spend. Simple programs
like test automaƟon, regression tesƟng and release
management, interoperability tesƟng, product
cerƟficaƟon etc. can easily improve producƟvity by
15-20% resulƟng in a business impact of up to 7-8%
of the R&D spend of the organizaƟon.
In addiƟon, programs like value engineering and
customizaƟon for emerging and adjacent markets
can result in addiƟonal incremental revenues with a
huge business impact.

HCL Case Study
For a leading consumer electronics company, HCL was
responsible for the ownership of soŌware develop-ment
and tesƟng for a full range of HDTVs consisƟng of
all TV ranges from 19” to 84”. In the process, we were
able to achieve 15% operaƟonal efficiency through
various acƟviƟes including value engineering for the
customer. Being a long term partner (over 17 years)
with the customer, we have been able to influence 23%
of the customer’s business which is close to $18B.
Strategic ESO Engagement – Supplier Sourced
InnovaƟon
Lastly, coming to the area of New Product IntroducƟon
(NPI), every organizaƟon would like to spend much
more than what is budgeted by senior management.
However, nobody wants to risk plagiarism by going the
engineering services outsourcing route.
By disintegraƟng the product engineering acƟviƟes,
companies can idenƟfy aspects of engineering which
are not domain- centric and differenƟated. There are
mulƟple cases of companies collaboraƟng with their
value chain around the overall customer experience
and using innovaƟons from their value chain partners.
Supplier sourced innovaƟon is quite common in
Hi-tech, Consumer Electronics and other verƟcals
which are characterized by extreme compeƟƟon and IP
centricity. Typically, ESPs set up InnovaƟon Groups and
focus on Context rather than Core areas for innovaƟon.
InnovaƟon happens in the ecosystem around the
product, plaƞorms to extend services of the product,
and emerging and adjacent market feature sets. There
are even instances of engagements wherein there are
contractual obligaƟons on the ESP to innovate and
come up with IPs.
Joint investments on collaboraƟve innovaƟon have
resulted in over 10X ROI for some customers in terms
of potenƟal revenue streams.
HCL Case Study
For a North American office automaƟon OEM, HCL
envisioned a strategy by launching an innovaƟon
campaign and also puƫng together a negoƟaƟon
approach to stabilize revenues and significantly
reduce the cap in service level credits.
As a part of the innovaƟon campaign, monthly ID
workshops were setup, innovaƟon champions were
idenƟfied, innovaƟon hubs were created, and a
review and improvement board for invenƟons was
established. Through this process, HCL was able to
generate over 70 patentable ideas in 12 months for
the customer in various areas like color accuracy
improvement, inverse half-toning, augmented reality
based form processing, image compression algo-rithms,
and NFC. These patents ulƟmately have the
potenƟal to impact over $500M of revenues for the
customer.
Strategic ESO Engagement – Plaƞorm & Ecosystem
Engineering
It is now being observed that products and soluƟons
also need to be part of an overall ecosystem to
succeed. The ecosystem ensures that end users are
provided with a seamless experience which encour-ages
them to sƟck to the product. To achieve this,
plaƞorms have to be built which encompass the
products and soluƟons. For example, the iPhone
wouldn't have been as big a success as it was without
the App Store plaƞorm.

While the primary requirement of a plaƞorm is to
create a marketplace for service moneƟzaƟon, the
way in which plaƞorms are implemented for different
funcƟons differ as follows:
1. Product management - User group plaƞorms to
assist prioriƟzaƟon of features and funcƟonaliƟes
as part of the product roadmap
2. Sales - eCommerce plaƞorms to facilitate service
moneƟzaƟon
3. Procurement - Partner portal to facilitate easy
collaboraƟon across the value chain
4. R&D - Enterprise portals to manage digital assets
and facilitate product development 70% of
plaƞorm engineering acƟviƟes are around basic
elements of single sign-on, mulƟ-tenancy,
orchestraƟon, metering & billing, data migraƟon
etc. which are typically domain agnosƟc. The use of
pre-built components can go a long way in the
acceleraƟon of plaƞorm development and deploy-ment.
Similarly, most plaƞorms these days need to
support a high amount of concurrent usage and need
to be highly secure as vulnerabiliƟes can result in a
huge market backlash. Plaƞorms also need to
integrate with best-of-breed enterprise packages to
incorporate domain centric business rules and
control logic (without reinvenƟng the wheel) which
are essenƟal for business. Hence, if the product is
integrated well with the plaƞorm and subsequently
the ecosystem, it can go a long way in exponenƟally
improving product experience resulƟng in increased
service revenues essenƟal for business impact.
Summary
There are mulƟple engagements which OEMs and ISVs can leverage with ESPs to ensure boƩom line and top line
impact on their businesses.
While the potenƟal savings and revenue impact are known, oŌen Ɵmes, the challenges are mostly within an
organizaƟon. Even a simple exercise like product porƞolio analysis can go awry as most of the stake holders would
not agree to a negaƟve categorizaƟon of their product due to personal stakes.
Programs iniƟated in good faith by senior management can be completely botched by high handedness of
execuƟves in dealing with the ESP as a vendor rather than a partner. Cultural differences between the company
and its supplier can also impede collaboraƟve success.
It is imperaƟve that organizaƟons take the help of Engineering Sourcing Advisors to plan the statement of
engineering services outsourcing work across products, geographies, funcƟons etc. in a phased manner. Effort
spent in planning and preparaƟon can never go waste and goes a long way in ensuring success for R&D
organizaƟons.

For more details contact:
Email : ers.info@hcl.com
TwiƩer : www.twiƩer.com/hclers
Website : www.hcltech.com/engineering-rd-services
Blog : www.hcltech.com/engineering-and-rd-services
HCL Technologies is a global IT services company, working with clients in the areas that impact and redefine the core of
their businesses. HCL focuses on ‘transformaƟonal outsourcing’, underlined by innovaƟon and value creaƟon, and
offers an integrated porƞolio of services including soŌware-led IT soluƟons, remote infrastructure management,
engineering and R&D services and BPO. HCL leverages its extensive global offshore infrastructure and network of
offices in 30+ countries to provide holisƟc, mulƟ-service delivery to customers.
HCL's Engineering and R&D Services (ERS) business unit enables technology led organizaƟons to go to market with
innovaƟve products and soluƟons. We partner with our customers in building world class products and creaƟng
associated soluƟon delivery ecosystems to help bring market leadership. We develop engineering products, soluƟons
and plaƞorms across Aerospace and Defense, AutomoƟve, Consumer Electronics, SoŌware, Online, Industrial Manufac-turing,
Medical Devices, Networking and Telecom, Office AutomaƟon, Semiconductor and Servers & Storage for our
customers.
Author Information:
ViƩal Devarajan
ViƩal heads MarkeƟng for the Engineering and R&D
services line of business at HCL Technologies. Some
of his contribuƟons at HCL include implementaƟon
of a decentralized Sales KM system for HCL and
Sales of Engineering services for the CIO community.
Ramesh Natarajan
Ramesh is a Deputy Manager at HCL ERS. He
manages content, web analyƟcs, digital, and
business markeƟng acƟviƟes in the HCL ERS
MarkeƟng team.
Akash Jauhari
Akash Jauhari is a part of HCL ERS’ strategy team
and focuses on areas like R&D markets, Technology
trends, ESO growth drivers, CompeƟtor analysis,
M&A and Strategic Planning.

Engineering services outsourcing_unraveling myths

Recommended

Recommended

More Related Content

What's hot

What's hot (19)

Viewers also liked

Viewers also liked (20)

Similar to Engineering services outsourcing_unraveling myths

Similar to Engineering services outsourcing_unraveling myths (20)

More from Akash Jauhari

More from Akash Jauhari (20)

Recently uploaded

Recently uploaded (20)

Engineering services outsourcing_unraveling myths