Outsourcing To India | The Magnum Group's Blog

Technology Outsourcing Chooses India

August 23, 2009 on 11:22 am | In CAD News | No Comments

A recent article in the 20th August print edition of the Economic Times, India, spoke about aircraft manufacturer Bombardier, the world’s third largest aircraft manufacturer with its headquarters at Montreal, Canada, looking at outsourcing to India.

Bombardier is looking to lower its operational costs by ratcheting its outsourcing of design projects up. Bombardier has requested Indian tech vendors to bid for an outsourcing contract which is said to be in the vicinity of $200 million in the coming years. The contract includes engineering design projects for Bombardier’s C-series jetliners for which Lease Corp is a major customer. Bombardier has already got the blueprint for the C-Series ready and is looking at India to source metallic and composite structure designs which include floor panels, landing gear, doors, fuselage and wings.

A couple of large Indian companies who are already working with Bombardier are discussing the contract with them while others are eyeing the opportunity. Bombardier Aerospace has been doing business with these companies since 2005.

Sources say that some of the said Indian companies have definitely decided to bid for the Bombardier contract. Certain of them are looking at a larger share of the contract which will include mechanical engineering design work.

Cost-saving is no longer the only reason aviation companies look to India. Now it’s also for her enormous group of talented, skilled engineers who understand the nitty-gritty of complex avionics. A senior spokesperson from an Indian joint venture said that their company had provided customers a cost-saving of at least 20-40 percent with their business models using a group of engineers who provided a range of related services within a time frame of 18-24 months.

Airbus and Boeing have already been outsourcing to India for some years. Boeing outsourced software development for its 787 Dreamliner to India, and is now in business talks with a number of smaller institutions for development of futuristic aerospace technology. Airbus is talking to Indian companies about making components for Boeing and Airbus’ doors and landing gears.

Currently at around $1.8 billion, the Indian engineering sources outsourcing (ESO) industry is expecting a growth of up to $50 billion over the next few years as aviation industries continue to look at outsourcing design work to India for lowering their costs.The legendary pool of smart Indian engineers does indeed exist and is making an increasingly significant contribution to high-flying products!

Outsourcing to India: Japan Warms Up

August 18, 2009 on 8:42 am | In CAD News | No Comments

A recent article in the Wall Street Journal described how there has been a significant increase in Japan’s hitherto minimal outsourcing to India.

This increase is in part due to enhanced efforts on the part of Indian service providers to penetrate the Japanese outsourcing market, a consequence of the Indian companies’ falling fortunes from the recession-plagued US market. On the other hand, it is also due to the Japanese noticing that many of their competitors are gaining cost advantages by outsourcing tasks to India, causing them to follow suit to maintain market share.

Examples of projects being outsourced are car navigation systems, automated securities trading systems and medical scanners.

The article mentioned how, in two very well-known Indian software companies, the very small teams dedicated to Japanese projects of a few years ago now teams with thousands of people. And these companies are predicting steady growth in the future due to the fact that very few new engineers are being produced in Japan.

Traditionally, cultural barriers, such as language and business conventions, have not permitted India’s outsourcing business with Japan to grow rapidly. So Indian companies are teaching their engineers the Japanese language and Japanese business customs.

An issue which has to be addressed is the difference in the Indian and Japanese product development strategies. The Indians believe in building , testing and delivering a product quickly then fixing any late-emerging bugs in the field as and when they occur. The Japanese, on the other hand, expect flawless performance from the moment of delivery, even if it takes longer to deliver the product. The article does not comment on whether the Indians have a solution to this, but judging how things have evolved in the past, it won’t be long before such a solution emerges.

Thanks for reading —

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