October 14, 2016

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Managed Engineering Services: The Future Model

What is Managed Engineering Services?

The landscape of engineering services has changed considerably over the past few decades. Firms are increasingly getting competitive and are trying to increase their global footprint. In order to develop a competitive advantage, they are concentrating more on their core activities. In order to cope up, there is an increased focus on cost reduction, which has in turn, led to the emergence of outsourcing strategies.

Companies are looking to be agile, lean, and improve continuously. As a result, they are increasingly looking to outsource their engineering services either to their captive counterparts located in Asia or to engineering service providers that provide a considerable cost advantage. This is further fueled by the lack of resources, infrastructure, and maturity capabilities available with the companies.

The engineering service providers themselves have evolved considerably over the past decade, spreading across the product life cycle from new product design & development, to value engineering to engineering analytics. Companies and engineering service providers are looking for business models which can replace the traditional staff augmentation models. And at the same time, the business model should be flexible and should react quickly to the technological changes.

Why Managed Engineering Services is being hailed as the future service model?

Managed services has been quite successful as a go-to model in the IT application space. Its emergence has led to convergence of clients & service provider interests. However, its acceptability & usage in the engineering service space has been negligible in the past decade. Whereas, in the same period, IT outsourcing has seen a number of projects moving or being handled in a managed mode. But the emergence of cloud & analytics has changed the company’s outlook towards the outsourcing business model in the engineering space. Companies are looking for those models where their involvement will be minimal, and at the same time, the service providers can be operationally transparent & held accountable. Companies are becoming more and more cost conscious and are only willing to pay for those service which they actually use.

This is where managed model in engineering services takes center stage. It answers all the problems that are existing in the current staff augmentation model.

  • The service provider completely owns the operations.
  • It is well governed by relevant metrics in delivering the service.
  • Companies don’t need to worry about the dilution of service quality as the compensation is not related to the service components, but to the service delivered/outcomes itself.

What’s so good about Managed Engineering Services?

Some of the prevalent models in the current market scenario are

  • In-House model
  • Co-Sourcing model

Let us compare Managed Engineering services with the above model on various components. This will help us better understand why managed engineering services will be the future go-to business model.

What does HCL offer?

HCL has a proven track record in offering managed services. HCL, with its experience and vast portfolio of services spread across industries and service lines, has the necessary capabilities to deliver services in a managed mode. The HCL Managed Engineering Services model offers a phase-wise transition of the client’s services into a managed mode, with the motto of continuous improvement. The model focuses on each and every element in detail and addresses the issues.

HCL’s Managed Engineering Services is underpinned by the following ideologies

  • Resource optimization
  • Manage end-to-end client services
  • Metrics driven cost savings

These ideologies lay the foundation for the phase-wise managed engineering service framework. All the different elements in the framework are in sync with these ideologies, thus making it a unified offering.

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