Mumbai: At the Nasscom India Leadership Forum 2008, off shoring of engineering services zeroed in largely one sector – automotive.

A panel made up of some of the best minds in the automotive design industry discussed the challenges faced in off shoring engineering services. The panel comprised

• BVR Mohan Reddy, founder chairman and managing director, Infotech Enerprises Ltd.
•  Tom Watson, vice president of engineering systems and technical planning, light vehicle systems at ArvinMeritor Inc.
• Anil Verma, global director for engineering and manufacturing strategy, Delphi Corporation.
• Alok Kumar, director of global engineering at Johnson Controls Inc.
• Praveen Goyal, TRW
• Vikas Sehgal, principal and director, India business at Booz Allen Hamilton

Leading the discussion, Vikas Sehgal set out for the audience that engineering forms the centre of the value chain as far as the automotive industry is concerned. Giving the example of world-class carmaker Toyota, he said the dual pillars of cost and quality, reliability and durability that are the pinions of Toyota's world leadership in cars, are both based on engineering.

However, he cautioned that while engineering outsourcing to India was ''on the anvil'' for the government, not enough was being done by government and other agencies, in comparison with China, a country which is ''really going after seeking out engineering off shoring opportunities.'' Sehgal thinks that China will overtake India on account of the incentives and aggressive seeking of these opportunities by China.

Tim Watson highlighted the challenges as a widespread lack of automotive product features in the Indian market. He said that as not all automotive product features, such as sunroof for example, are available in India, and consequently, the talent pool that has been exposed to these systems and understands all these automotive systems is also not very large.

This results in a larger lead-time for developing talent, which has the requisite experience, and calls for more support and mentoring. The additional hand holding in terms of support ties up resources, and drives up costs. Another challenge is the higher cost of engineering tools in India.

Opportunities, according to Watson, are aplenty as well. India has superior process capability, drawing from its IT outsourcing experience, and the process based CAD and CAE sourcing is very mature in the country. He also said there was ease of building readiness for domestic market entry.

Anil Verma highlighted the need for talent management, and attrition management in the Indian workforce, saying that it take exposure and experience of two or more product development cycles for a resource to become proficient at their jobs. As engineering needs more time to develop competencies, it calls for people to have a much higher level of commitment to their jobs, and needs them to stay around for a longer time to effectively learn the domain. He cited the biggest organisational challenge as managing attrition.

According to Alok Kumar, the chief challenges facing engineering outsourcing to India are a higher turnover, limited exposure to manufacturing and assembling, which results in cost implications. Additionally, infrastructure issues and intellectual property concerns are also high up on the list.

The opportunities, however, include India's unfolding economic growth story, and a good supply of graduate and postgraduate engineers. Kumar said that India was probably one of the only places in the world where supply of engineers would keep pace, or even outstrip their demand, as other geographies no longer had the requisite supply. He also said that there was room for the adoption of a ''lean model'' of outsourcing, which would exclude monitors and ''routers'' in North America and other countries that form a conduit for off shoring to India, but add little or no ''engineering value.''

Kumar also pointed out that progression to a ''meritocracy'' career path was another opportunity, with Indian resources travelling to global locations and bring back learning and experience, especially with regard to the manufacturing base, where they experience various manufacturing and assembly systems at different global locations, and are able to transition their learnings to more effective design.

Praveen Goel of TRW cited the lack of capital-intensive test facilities as one of the major challenges to off shoring engineering to India. ''Engineering takes touch and feel, and cannot be learnt on a PC or by reading books,'' said Goel, highlighting the different training and experience needs of engineering as compared to the IT and ITES sectors. Engineering is about rolling up the sleeves, and getting the hands dirty.

As counter strategies to the challenges, the panel discussed various solutions adopted for off shoring engineering services, including the regular and frequent exchange of people to client sites on-site, and people travelling from global locations to India for knowledge sharing and transfer sessions.

To leverage cost benefits, companies have also adopted computer-based trainings that are delivered remotely from other global locations.

However, the single biggest factor in developing engineering competencies, according to the panel, was allowing adequate time to progress from low complexity work to more complex work, allowing for a learning curve that would not see any rollbacks.

Companies are also allowing for a ''training pipeline'' at facilities across the world, which enables the ''touch and feel'' with manufacturing and assembly.