What’s new in engineering services? 14 potentially disruptive trends in engineering services supplier landscape

The most frequent question people ask me is what’s new in engineering services? Here is my take on 14 potentially disruptive trends in engineering services supplier landscape. I am carefully using the words potentially disruptive, as these trends are not disruptive yet but have the potential to change the game if done at scale.

14 disruptions in engineering services supplier landscape

Some of the service providers which are at the forefront of one or more of these trends are – Capgemini/ Altran, Accenture, IBM, HCL, TCS, Wipro, LTTS, Tech Mahindra, Infosys, EPAM, Persistent, HARMAN, Cognizant, KPIT, Tata Elxsi and Bertrand(Disclaimer- That doesn’t mean that other service providers are not working on these trends, but service providers mentioned are more visible than others in my limited line of sight =)

Why are these trends important?Why are these trends important?

Despite growing at a healthy rate, we have not seen an inflection point in engineering services yet. Only 5% of ER&D spend is outsourced to service providers. In a way, engineering services growth is not a demand problem but supply problem. To convince product owners to outsource their core work to service providers, one needs to have a better value proposition than cost arbitrage and flexibility. I hope some of the above trends help engineering service providers to differentiate and engineering service industry to cross the inflection point (capture at least double-digit of ER&D spend).