Companies need to adopt a refined approach and should also keep in mind all the necessary business deliverables while selecting supplier(s). In particular, it becomes even more important when the option of outsourcing business to offshore companies is being considered by top bosses. In this context, before the implementation of offshore outsourcing, a number of things have to be considered minutely, such as cultural differences, language barriers and understanding of objectives. Another altogether different challenge faced by companies revolves around consideration of multiple suppliers for handling different business units. Notably, even though many suppliers offer an array of services, it is typically hard to find every solution under one umbrella. Thus, if a company wants to outsource several services, it might need to deal effectively with the management of multiple suppliers.

Engineering Services Outsourcing (ESO) has become highly fragmented as more and more companies are willing to outsource their business for profitability and efficient delivery. Such companies are eager to make a deal with supplier(s) that can handle various business units and services. Therefore, there is a requirement of dedicated approach towards integration of outsourcing functions and metric based assessment of performance. Furthermore, while deciding to outsource business, it is also very important to analyse market to find out mature and capable suppliers. Adopting such measures will help to ensure long term improvement and success of various outsourced businesses.

While choosing a supplier to handle the outsourced business, it is imperative to evaluate their qualifications, ability to provide industry expertise and past performance. For high end services, it might be even customary for the outsource service providers to have specific certifications. The supplier selection should be more oriented towards meeting business expectations, quality adherence and compliance. Companies also need to have a thorough understanding of the cost structure and ramp plan of suppliers. In this respect, the ESO partner must have ample resources and infrastructure to handle initial transition of business and subsequent timely deliveries.

To summarise, some key characteristics that organisations expect from their ESO partners include:

The rising operational cost that includes wages, infrastructure and other overheads has put much pressure on ESO (Engineering Services Outsourcing) companies to strive continually for higher productivity. Furthermore, the market is driven by cut-throat competition that has resulted in lower bill rates and pressure on margins. So, it becomes even pretty important to keep a close eye on the productivity of the task force for retaining or improving business margins.

The productivity initiatives take in account process improvement and automation. The whole success story pretty much depends on the culture that is driven in the organisation. Inviting ideas from the workforce and implementing them also goes a long way to improve on productivity and reduce individual transaction time. In this regard, the management has to push its workforce to inculcate the habit of sharing ideas. Every idea should be carefully evaluated, implemented and tracked before its seamless integration into operations. Initiatives to drive productivity improvement will help to reduce the time taken to finish off various transactions, thereby making an impact on the overall operational efficiency.

To increase the productivity of the workforce, following steps can be adhered to. Here, it must be noted that these are only few key points that can be considered while striving for the productivity improvement:

Apart from the aforementioned measures, there are other ways too for enhancing the overall productivity. Different organisations may have different processes and businesses to handle, but still the overall goal is as simple as productivity improvement for better margin, timely delivery and getting an edge over direct competitors.

LEAN/Six-Sigma: The concept of LEAN is geared towards reducing waste in the process while Six-Sigma helps in achieving process excellence. Companies usually strive for process improvement by means of LEAN/Six-Sigma projects. These are industry recognised tool that are used across various sectors. The concept of six-sigma helps to clearly define process and set measurable goals/metrics to improve the overall process.

Automation/KBE: Automation and Knowledge Based Engineering (KBE) helps ESO companies to strive for process excellence through innovation. There are several benefits of automation in any process, most obvious being reduction of manual work and errors. Apart from this, some other key benefits of automation include decrease in the processing time of various transactions, focus on other value add tasks and utilisation of less experienced task force. While carrying out daily business chores, there is always a possibility to implement automation of repeated tasks for improving the productivity. Tools can be interconnected for exchanging information and faster execution.

Knowledge Based Engineering is basically a process that helps to capture the knowledge during the course of product development. It is put to good use through optimisation with parameters and rules. KBE can also be easily integrated with knowledge (design) templates and then reused. Today, there is too much performance pressure on ESO companies. Thus, making use of KBE has become even more important. The need of KBE to achieve efficiency by adopting innovative platforms is also paramount, considering the cost factor and product development cycle. Formalising design and process development can help ESO companies to put good practices in place in order to reduce cost, design lapses and cycle time.

KBE makes use of rule based technologies for innovation, letting customer engineer focus more on new product initiatives and evaluation of multiple designs. Many people refer KBE as advanced automation as it helps in automated analysis of given inputs to generate engineering solutions. KBE has a broad scope and covers various activities related to multidisciplinary design optimization, analysis, product life cycle management and manufacturing.

While above mentioned industry recognised tools can surely be used to achieve operational excellence, it is not an end to the road of opportunities. The ESO companies should also be ready to imbibe and make use of other innovative practices to get a decisive edge in the market and move up the value chain.

With the maturity of Engineering Outsourcing Services, companies now seek ESO partners that can help drive business dynamics through means of collaboration. Such a practice helps both parent organisations and ESO companies in the long run to drive businesses profitably and develop a long-term association.

Earlier, a part or whole business unit used to be outsourced to the provider. However, with changing business environment across the globe, companies have realised that it is far better to transform pure sourcing relationships into strategic partnerships. The want of efficiency, flexibility, scalability and knowledge sharing for the business growth has played a crucial role in emergence of the concept of collaborative innovation. A partnership based on collaboration helps to have a better understanding of products, thereby ensuring innovation right from the transition phase to delivery. It also helps to clearly define roles and responsibilities for driving the business to success.

Collaboration between companies with the right approach can help in getting long term strategic business benefits. In this context, outsourcing providers can help the company to focus primarily on their core business by taking care of the non-core activities. Process improvement is yet another significant benefit of collaboration as both, company and outsourcing partner can exchange good practices.

When it comes to collaboration innovation, there are endless opportunities that wait to be harnessed and put to good use for moving up the value chain. Collaboration is just not limited to savings. Rather, it goes far beyond, essentially leading to the use of innovation platforms and firing a passion for growth. Furthermore, a good understanding is always beneficial for companies and their engineering outsourcing providers. To summarise things, it is apt to say that collaboration innovation will help to mutually work towards a common goal of firing the business growth in the long run.