Rainmakers of engg services boost biz: Indian Tech’s Fastest Growing Segment Runs On Execs Whom Customers Trust

When former chief digital officer at Rolls-Royce Neil Crockett wanted to identify a service provider to accelerate its IoT (internet-of-things) capabilities three years ago, he floated a request for proposal (RFP). The company wanted to use IoT to get a lot more data from customers and use that to provide long-term service contracts.

Ayyaswamy presented TCS’s IoT platform, called Connected Universe Platform (TCUP), that helps develop and deploy IoT applications. Having worked with Rolls-Royce, TCS had a deep knowledge of its engines, blades, compressors and exhaust. “We were able to characterise what we could do for them. Our strength was contextual knowledge, digital platforms, information security, core engineering, capability around services. We were able to bring the might of TCS into making their business goal a reality,” Ayyaswamy says.Reguraman Ayyaswamy, global head of IoT & engineering and industrial services at TCS, saw it as a great opportunity for the company, and he knew he had his task cut out. Roll-Royce specialises in highperformance power systems engineering and aircraft engines. It was a decade-old-customer for TCS. But this was a different kind of engagement, one that impacted the core operations of Rolls-Royce, and TCS would really have to prove its capabilities. Other IT players too were participating in the RFP.

TCS won the deal. Ayyaswamy declined to mention the deal value, but independent sources estimate it is around $20 million annually. The platform today captures and analyses data to reduce the cycle time for Rolls-Royce to develop new products and services.

Getting customers to outsource core engineering work is very difficult, but Indian IT companies today have built significant expertise in the field, and it has become the fastest growing business for them. Deals above $10 million are considered large in this space. It is also a high-margin business. Industry body Nasscom in its 2018 strategic review called out engineering and R&D and product development as the fastest growing segment in IT services, growing at 12.8%, led by demand for connected cars, mobility and connectivity.

Pareekh Jain, founder of Pareekh Consulting, says the growth in engineering services is not a demand problem, as much as a supply problem. “Of the over $1-trillion R&D spend, only $60 billion or 6% is currently outsourced. There is a huge market but someone needs to go out and make it happen. That’s why the role of key executives and rainmakers are important,” he says.

L&T Technology Services, Persistent and HCL each won an over $50-million deal in the last two years, signalling a psychological threshold that would open up upstream, high-end engineering opportunities.

Source: The Times of India dated 6 March, 2019