In June of 2017, I met Shyam Sirur, the principle owner of Cotmac, an international Systems Engineering company. My wife and I hosted him and his wife in Atlanta where they were attending the International Rotary convention. Shyam asked a question that I found very interesting and which led to me eventually join his company.
“Why don’t American companies use Indian Systems Engineering companies like they do Indian Software companies?” We discussed the question over the four days of their stay. There were explainable differences in the early 90’s, but they are no longer applicable. Outsourcing in Systems Engineering can be equally as beneficial as it was in Software Engineering.
Many Americans believe that India gained far more from the software explosion of the last thirty years than America. They are wrong. Yes, outsourcing software development and services to Indian companies benefitted them and the Indian economy immensely. But the companies that benefitted the most were American.
In 2017, the five largest software companies in the world were Microsoft, Alphabet (Google), IBM, Oracle and Facebook. These are all American companies. These five companies have a market capitalization more than ten times as much as India’s top ten software companies. Each of these five companies have operations in India and use Indian based consulting companies and engineers around the world. They provide more for less than companies from other parts of the world. They have helped to make America the leader in software in the world.
But why didn’t the same thing happen in Systems Engineering? If we explore the positives that India had/has we see many are the same for both industries: 1) Strong English language skills. 2) Abundant well-educated workforce. 3) Relatively low cost of highly technical labor. 4) Strong higher education infrastructure – India Institutes of Technology started by engineering graduates of MIT are world class.
One which was not the same was device communication. The Indian Government created a corporation called Software Technology Parks of India (STPI) which set up satellite communications, so developers could work online with their American counterparts. Unfortunately, the technology didn’t allow the developers in India to program local devices remotely like their software counterparts could do with a server. The need to have on premise technical talent slowed the growth of Indian outsourcing in the Systems Engineering world. This limitation is not a major issue in today’s world.
Another difference is the hardware aspect of systems engineering. Hardware and the panels that are used to control them don’t have a corresponding element in software engineering. Panels and controllers are typically procured locally and installed and commissioned on site. However, with today’s global distribution systems, panels can be produced in India and delivered to the U.S. at a lower total landed cost than those built in the U.S. What once was an impediment to using offshore services is instead an advantage.
The advantages of using offshore services is enhanced when the company has a U.S. operation to manage the project and place engineers as needed onsite. The same models used in the software industry are applied for industrial automation with similar success. Lower costs, better quality, faster delivery help U.S. companies grow. American companies can benefit by partnering with a global Systems Engineering company to deliver better results on Factory Automation projects. Those benefits lead to an increased market share and long-term profits.