India has always been the most sought after destination for outsourcing but now it is clearly emerging as a front runner in the ‘Outsourced Innovation’ space. The design and development services outsourced for innovation are mainly in the areas of VLSI and embedded systems design. North America and European countries are increasingly turning to offshore outsourcing services in the product engineering space in India to innovate products, cut costs and achieve their profitability goals.
More done today
Over the years India has witnessed a change in the mindset of outsourcing companies across the globe. In the past, companies would work on the main design in their home base and outsource only that part which was not critical in their entire design cycle. But now the entire job is given to India due to the technical competency of the country’s skilled engineering talent pool.
Furthermore, growth in business for Indian design companies is due largely to the partnerships formed by IDMs with third-party board design firms in India for new products/technologies. These companies also rely on their respective captive centers for design and development of innovate products using next generation technology. Usually the captive centers focus on advanced technologies and help in development of products for the global market.
Most of the time designs are led by consumers as per the latest FAD that wants additional features at low costs, causing design companies to have complex products aimed at the smaller market windows, while ensuring control over design costs.
Moving in the right direction
India’s design market is in a growth phase with the emergence of captive, non-captive design centers and start-ups. These centers started with the objective of cost gains but now the focus has turned on quality of work and innovation. These companies are focus on niche technologies in designs, and are spearheading the marathon of innovation that is set to take place in the future. These service companies’ have created a niche in the worldwide market when it comes to product engineering and innovation
With higher levels of design capability and technical competency, the usage and dependence on skilled engineering talent has increased by leaps and bounds in India. Many IC and PCB design companies that offer top quality services at affordable raters have surfaced in the country. These companies have succeeded in gaining the trust and confidence of international businesses due to consistent excellence in service output. India is the leader in outsourcing services, particularly in VLSI design and development.
Some reasons for outsourcing design services to India:
· Design companies in India maintain high quality standards and follow norms set by International quality agencies,
· Services offered by professional organizations are of international quality and appeal to global customers,
· Engineering talent available in India is technically superior and very cost effective in comparison to other countries. These companies visualize innovation and are successfully in executing their visions without affecting budgets, and
· India has the highest number of experienced and well-trained VLSI professionals in comparison to other developing countries, and
Most design companies in India have been service providers that derived their business advantage from low operating costs, as compared to the rest of the world. However, in the past few years, this cost advantage has come under significant pressure from IC design companies in other regions of the world. It has now essential for Indian companies to focus on innovative products in niche areas to sustain and grow their businesses.
India has always had engineering talent. The years of working with multinational corporations and large Indian service providers have provided Indian engineers with the ability to perform, ideas to innovate, strength of experience, and agile business acumen.
The most essential ingredient for outsourcing today is an understanding that innovation is vital and will be a springboard for every rupee spent. Outsourced innovation is catching on and India, with its global network of partners, is helping to create products using the latest technologies.
Great finished approach
Many top-level management professionals as well as leading entrepreneurs note that India's technology boom is driven by a demographic situation that is difficult for other nations to match. India has a large population of young people who are well-educated and work for relatively low wages. This has helped Indian companies establish themselves as key providers for offshore software development, and the country is now gaining greater momentum in the hardware development space, including integrated circuit (IC) design and board design.
Core competency
Many companies are talking about India’s “core competencies” as being the logical reason for outsourcing their innovations to the country. This means that design centers should focus or develop what they are very good at and outsource the rest to a competent third party. If a company wishes to enjoy the benefits of innovation then it will have to make conscious decisions about that country’s core competencies.
You can reach Raghu Panicker at raghu_panicker@mentor.com
