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The Evolution of Outsourcing Engineering

The Evolution of Outsourcing Engineering

In the past, most companies developed their own engineering departments to satisfy their internal requirements. Most recently, there have been critical developments in the evolution of outsourcing engineering.

How Important are Engineers to Our Future?

Our modern society depends on innovation in technology, products, and materials. Engineers apply principles of mathematics and science to the development in these three areas. Engineers affect many aspects of our lives: civil engineers plan out living spaces, mechanical engineers design transportation solutions, computer engineers create new possibilities with technology, chemical and biological engineers play a critical role in the quality of our health care and manufacturing engineers supply us with the products we use.

Without question, we need these valuable skills. But how will industries meet the demand for engineers? “98% of companies report there will be a negative business impact if they cannot find and hire the right engineers,” reported by Tech-Clarity. But many countries are suffering from a shortage of the right talent. “The shortage affects various industries, with the manufacturing sector alone predicted to need about 3.5 million jobs by 2025 — but up to 2 million of these positions might go unfilled due to the difficulty of finding qualified workers,” acknowledges USNews. How will industries solve this issue?

Outsourcing Engineering as a Solution

One very viable solution is outsourcing the engineering task required by your company to an expert firm. Finally, the evolution of outsourcing engineering is at such a mature stage that many companies are finding success with the process.

The Evolution of Outsourcing Engineering

There have been three waves in the engineering services outsourcing (ESO) in the last few decades.

  • In the first wave of outsourcing engineering in the first decade of the 2000s, this service was relatively small in comparison to the explosion of outsourcing for Information Technology (IT) or business process outsourcing (BPO). The approach was somewhat tentative. The companies tended to sign time and material (T&M) contracts for specific tasks, and most contracts were renewed on a yearly basis.
  • During the second wave from 2010 to 2017, there was a focus on the Internet of Things (IoT). Along came sensor technology, wireless connections, more computing capabilities, and a surge in big data analysis. The ESO providers met this challenge by developing intelligent engineering applications to give us products such as smart homes, cars with internet capabilities, and real-time healthcare. These innovations were based on capturing data and using a continuous feedback loop.The products in response were more intelligent to meet specific customer needs. The products were no not just viewed as mere objects but as a service to the user. For instance, refrigerator became capable of providing real-time responses for how much milk you have when you are at the grocery store shopping for the week’s meals. Your car includes an infotainment center that keeps you connected to your family, friends, and work, as well as predicting the weather and guiding you to your destination.
  • We are just entering the third phase in this engineering evolution with the integration of IT, engineering, and manufacturing. The merging of several technologies in automation, robotics, and 3D printing will bring a profound change in manufacturing. The digital shop floor is now possible. Not only will this innovation impact the production of things, but it will also change the repair cycle. It is possible to imagine a washing machine that while monitoring its own working, detects an issue with a part. From that detection, a signal is sent to a local provider ordering the part to be printed for repair. The cost savings in time and the convenience for the consumer will be incredible.

How Will This Evolution Change Engineering?

The focus will move from developing products to embracing new processes and technologies. The ESO providers will evolve from being hired on a contract basis to being integrated with the clients. This will tie the success of the outsourcing company to its engineering firm so that they will reap the rewards in unison. Three areas of engineering are on the cusp of such an expansion.

Civil Engineering: With the unprecedented amount of building throughout the world, there is a need for more civil engineers. According to Globe-News Wire there is strong demand for this skill in North America, Europe, and the Asia Pacific to 2025. “The segment is projected to reach USD 661.0 billion by 2025, exhibiting a CAGR (compound annual growth rate) of 4.4% over the forecast period.”

Outsourcing companies ensure that they hire civil engineers who have the right experience to meet client’s business needs. The engineers are well qualified, and usually have experience working in foreign countries. It most likely will be more cost-effective to hire this expertise on a short-term basis, instead of creating an engineering department in your company.

Product Engineering: “The strategy of long-term, gradual development in the area of production engineering, based, among others, on knowledge engineering technologies designed to support the processing and efficient use of data, cannot be implemented with the sole use of the resources of a typical company,” claims a report from Research Gate. It is inevitable that companies will seek expertise outside their firms.

Mechanical Engineering: In mechanical engineering, companies that want to stand out will consider three important factors: designing an innovative product, keeping the costs down, and making the product connected to the world of information. In the modern-day competitive environment, it is vital to select an outsourcing company that is dedicated to fulfilling your demands with these three trends.

Where Is the Training of Engineering Expertise Encouraged?

The Philippines is adding engineering to its long list of success in outsourcing expertise. In 2019 the Far East Air Transport Incorporated University in the Philippines and international software company MSC Software Corp. partnered with an eye on a lofty goal. “One of the main visions of this partnership is to make the Philippines a global giant in the engineering industry. To achieve this goal, producing competent and well-prepared engineers is paramount,” as reported by Manila Bulletin. It is significant that the Philippine government is determined to grow its outsourcing business through grants, reduced taxes, and offering other incentives, while actively supporting the latest development needs in the market: AI (artificial intelligence), robotics and engineering.

Many expert outsourcing firms are already at the leading edge, ready to partner with you with a well-trained talent pool to tackle your newest state of the art project.

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