Top Engineering Outsourcing Trends For 2016


Global engineering is getting a lot of traction and product companies across different industry verticals are outsourcing their complete product lifecycle. With changing consumer demographics and their new demands, emerging competition from different players and technological advancements have changed the drivers for outsourcing in the engineering domain in the last one year and we are observing the following industry and technology trends to look for in the years to come.

Here are some of the industry trends we are observing:

a) Shorter product lifecycle: Today’s consumers are well informed and knowledgeable. They seek instant gratification and seamless experience across all walks of life. This puts a lot of pressure on enterprise in crunching their product lifecycle so that they are ahead of competition and can grab the market share early. Hence enterprises are leveraging the partnerships with their engineering service providers for product design work and faster product development requirements

 b) Market Adjacency: Enterprises are looking to adjacent markets for growth and are looking at partnering with engineering outsourcing service providers for delivering complete new product design as well as bringing niche skills in order to make the complete product development process smoother and cost effective

 c) Collaboration with Start-ups and ecosystem players: For developing the niche, SMART products, engineering service providers are collaborating with start-up companies including manufacturing start-ups and other industry ecosystem players. This initiative is not only giving them the access to the new, niche skills but also helping them in rapid prototyping. These partnerships also enable them in value engineering and developing frugal versions of the enterprise products that can compete at different price points in different markets fulfilling customer requirements.

Apart from these industry trends, there are important technology trends that we are observing:

a) Cyber-Physical integration is driving the demand for SMART products and Industry 4.0 platforms: Technology advancements and growing consumer expectations are driving a lot demand for SMART products such as wearables, smart cars, etc. by leveraging software, hardware and embedded skills E.g. Embedded sensors trigger instant response to multiple stimuli - order replenishment in a coffee vending machine, collision avoidance in vehicles, and pilferage protection on the shop floor. The fourth industrial revolution is transforming the way factories and manufacturing plants operate. Every asset has become the source of information and Industry 4.0 is changing the every aspect of manufacturing, research & development, product engineering and distribution.

The use cases of Industry 4.0 are driven by delivering superior customer experience and bringing efficiency across the value chain. One important use case of this trend is improving the asset efficiency that enables holistic monitoring, analysis and optimization of critical infrastructure assets such as landing gear of the aircraft. Another one is to create more intelligent linkages between the three phases of manufacturing – design, production and field testing/service. By capturing, analyzing and relaying real-time sensory and historical data at each of these phases, the system generates insights that can help field engineers and service teams identify the root cause of component failure easily, and provide faster corrections to flaws in design engineering and manufacturing operations.

b) Emergence of new technologies driving disruptive changes: Different emerging technologies are influencing the way engineering service providers operate and the impact that they bring on today’s enterprises. The few examples of such technologies are as follows:


·         Simulation, artificial intelligence and advanced modeling help original equipment manufacturers, suppliers, architects, design engineers, product designers, and software developers develop unique products and services. The convergence of diverse skills, materials and technologies are ensuring design of cleaner, lighter and safer products that conserve resources, minimize wastage and reduce costs

·         The availability of composites and lightweight material are enabling enterprises to rethink the design of their products with the help of engineering service providers. Especially in the aerospace sector, composite expertise of engineering service providers are helping in designing products which are fuel efficiency, are lighter and cost effective. The 3D printing technology enables on-demand and on-location production of food, cars and buildings. It enables near-instant prototyping, easy redesign of complex products, and short lead times

·         Software Defined Networking (SDN) and Network Function Virtualization (NFV) are bringing the disruptive changes across the telecom vertical. SDN fundamentally separates the more proprietary and embedded data plane of a network element from the more programmable and flexible control plane. Along with NFV, which helps network element software to be converted as Virtualized Network Functions (VNF), technology becomes a powerful vehicle for software control. Both these technologies are bringing a huge possibility of automation through right integration enabling better customer experience

·         Software Product Development is becoming very important area for engineering service providers and they are looking at making the entire development process more innovative. Innovation is driven by integrating Development + Operations and hence concept of DevOps and Agile Development are becoming mainstream. DevOps ensures reduction in production time and costs

Product engineering is undertaking an interesting journey. Design inspiration is meeting functional objectives through technological advancements and digital business models. However, decentralized manufacturing systems should converge with newer software techniques for a sustainable product lifecycle. Engineering can get more intuitive when there is synchronicity at a human, technology and atomic level. We are all very eager to experience it in 2016 to make it happen.