- 23 January, 2018
- Posted by: AXA Engineers
- Category: Company
Recent years, demand of engineering services outsourcing companies is growing quickly, especially for offshore vendors. A research of TBR – a reputed analysis firm has proved convincingly this trend. This post will show some findings from that research and real results from AXA Engineer’s experiences.
First of all, we need to understand adequately what is engineering outsourcing services as well as its current state in the market. There for, it is necessary to define the functions that are considered engineering services. Following TBR’s point of view, Engineering services are tasks that involve the nonphysical acts of engineering, such as the preparation, design, and consulting work supporting engineering. Engineering service providers solely focus on the services for engineering and rarely work on the engineering processes they establish, consult, and/or manage.
Folloing TBR’s data, the current size of the global R&D industry at $1.1 trillion per year in 2017, or less than 2% of the world economy, and it is expected to grow to more than $1.4 trillion by 2020. The same sources estimate the current amount of engineering services being offshored each year is less than 10% of total market share. TBR believes ESO vendors have the capabilities to more
than double this figure. Studies indicate roughly 30% of international companies have outsourced aspects of their new product development. All of these figures are expected to see significant growth within the next few years. In Civil Engineering outsourcing services, there are some sub-areas become more popular in recent years such as: Land Development outsourcing services, CAD outsourcing services,etc.
Historically, several factors were cause for concern when companies considered engineering services outsourcing; the largest concerns include turnaround time, quality and trust. ESO involves a higher level of functionality within a company and is strategic to a company’s value proposition, as it drives innovation. Due to this, companies tend to keep engineering services on-site and leverage outsourced services for lower-level functions, such as finance, accounting and manufacturing. However, because of the economic climate and cost-saving potential, many companies can no longer justify keeping their engineering services in-house.
Another primary concern with engineering services outsourcing companies that is the perceived slow turnaround time. In today’s market there is ever-increasing demand for faster delivery of products and services. Due to technology advancements significantly decreasing product lifecycles, clients are increasingly demanding faster delivery of services to obtain a competitive advantage over rivals. ESO vendors like AXA Engineers have realized this, and are now able to deliver their engineering services as fast as, or faster than, companies would be able to internally. The final issue for hesitation of many people is quality concerns. In the past, firms would hesitate to outsource engineering services due to the inferior product that outsourcing returned; however, ESO vendors invested in increased quality awareness to produce a quality outcome, and now firms that leverage ESO are able to obtain high-quality services. Indeed, engineering services outsourcing companies like AXA Engineers has engineers who has been working with US consulting companies over ten years could bring highest quality services for their clients.