By shipping engineering services jobs to India, Western firms can substantially decrease their expenditure and put the talent of their in-house employees to better use. Offshoring repetitive and labor-intensive engineering tasks such as design to another country enables the in-house employees to focus on core competencies and more critical tasks.
As a matter of fact, engineering services are sent to India to such an extent that projections by industry professionals indicate that the trend is here to stay. The current size of the Engineering Services Outsourcing (ESO) market is estimated to be worth around $1.8 billion, and is expected to reach $40 billion by 2015, and $50 billion by 2020 for the country.
India can expect to win about 25 percent of current and projected offshore engineering spend, which is about $50 billion
The reasons why companies want to, and will continue to, offshore jobs such as engineering services to India are enabling and empowering factors in favor of India’s engineering outsourcing firms.
An outsourcing vendor who is qualified and specializes in a specific engineering service domain can offer better solutions and services for clients.
Most of the clients outsource engineering services such as design services related to patented products, design specifications, or customized interiors of a total engineering solution.
A lot of companies have been able to use the skill-sets, experience, and tools of IT software and services, and have started providing data conversion. They are doing so with the help of 2D and 3D CAD/CAM/CAE. These players also use prototyping, product design, plant automation, and advanced simulation techniques. A majority of companies in this segment started from legacy IT service businesses; however, these companies have matured and established themselves as independent engineering services companies.
For these complex and sophisticated tasks, companies, when they offshore engineering services to India, need engineering professionals who have technical skills, domain expertise, and good engineering judgment.
And India’s many engineering colleges, including the renowned IITs (Indian Institutes of Technology) provide all the necessary talent.
The other major empowering factor is cost. Take for instance cost arbitrage (simultaneous purchase of labor in two different markets) in engineering services. It’s about $25 per hour in India and $75 per hour in the U.S.
When all these advantages are considered, it makes eminent business sense to offshore engineering services to India.