Having spent thirty years in IT and experiencing the explosion of software engineering and the rise of outsourcing as a strategic advantage for domestic companies, I am excited about sharing the insights I learned in that industry with the automation controls industry. While the overall impact of outsourcing has been extremely positive, not all individual experiences have been positive. Understanding the benefits outsourcing can provide (see previous blog post – ‘Reaping the Benefits of Outsourcing’) and knowing how to select a good partner are two key elements of a successful relationship.
Once you have a good grasp on what strategic goals are most important for you to pursue with outsourcing, you can look for possible partners that will best meet your needs. Do note however, that the strategic goals of today may change in this rapidly changing technological world we live in today. Let’s look at some of the key factors to consider:
Growth: Companies must grow or die. The worldwide competitive environment today requires growth. A partner that can provide you resources as needed is a key asset to your company. Because the world is smaller today than it has ever been, you need a partner that can provide resources in country, nearshore and offshore. You need a partner that can operate in worldwide locations. Your partner should be growing and entering new markets, new locations and extending services. Their power becomes your power.
Size Matters: The larger you are, the larger your partner should be. This applies to the number of engineers you have, the number of countries you operate in, the rate at which you are growing, etc. Size matters in several ways. Each engineer has a limited set of knowledge, skills and experience that you may need. Twenty engineers can’t provide the same coverage that a hundred can which likewise can’t meet the same demands that five hundred can.
This also applies to the breadth of industries that an outsourcer covers. Diverse experiences are very beneficial in solving technical problems. Solutions in one area shed a lot of light on finding solutions in others. Five hundred engineers all working on automobile factory automation will not have access to some unique insights that a mixture of auto, chemical, food and beverage, material handling, expertise can bring.
Location, Location, Location: The most successful partnerships have been involved in and seen have had offices in the country where the work was being done. This is more critical the more complicated the work is. The ability to have a local presence to help clarify, demonstrate, teach, brainstorm with, etc., is essential. Location of the outsource workforce is equally important. Cost is a major consideration as is the access to talent and technology. Romania, the Philippines, Viet Nam are low cost, but they do not have the access to talent – India graduates 50% more engineers than does the U.S. and more than all three of those countries do combined. China provides low cost and access to talent, but it lacks the diversity of companies operating in China that India has. GE, Siemens, ABB, Rockwell Automation, Fanuc, Honeywell International, Emerson Electric Co., Schneider Electric, AutoCAD, EPLAN, etc., are active in India.
Systems and Certifications: A good partner needs to have good systems to maintain and grow their ability to help you. A good quality system, a good training system are must haves. Is there a system to assure that quality work is being producedand delivered? Is there a training program to assure that technical resources are keeping abreast of changes and innovations in the industry? Likewise, your partner needs to be certified in the standards that your company is operating under. UL, CE, EN IEC, ISO, etc., certifications are standards that must be met in different countries. Your partner can extend your reach by providing capabilities that your company doesn’t have.
Risk Reduction: A good partner reduces your risks in a wide variety of circumstances. The cost of acquiring and maintaining a technical workforce is growing. An outsourcing company can offer much more variety of experiences, technical challenges and learning opportunities than a captive in-house operation. When needs change, an outsourcing partner will be much more likely to have the talent or access to the talent you need than exists within your company. The cost of acquiring and maintaining a technical workforce which is the core business of an outsourcer is less because that is their focus even without considering location derived advantages.
Another risk is the ability to respond to growth opportunities. Growth can happen via a new product, a new related market, or a new location. Each of these has its own risks associated with meeting the new demand. A strong partner can provide the resources you need quicker and with more expertise. A good partner with nearshore capabilities in addition to offshore ones can provide a response to opportunities that you otherwise wouldn’t have.
Expertise and Relationships: A good automation controls partner has solid relationships with a variety of the major producers in the industry. Look for and ask about these relationships. A good partner is up on the latest technologies and products and how they can be used to solve real world problems. Partners who are working on leading edge projects with leading edge companies are doing so for a reason.
In addition to expertise and relationships in the industry, a good partner should also have relationships in related technologies. They can do this by partnering with companies that offer things that they can’t. like robotics, vision systems, data analytics, documentation, etc. If some of these things are becoming a growing part of your need, your partner can increase their expertise in them without you having to invest resources needed for you core business.
Range of Services: A partner who can provide a wider variety of services has more potential to help companies achieve success. They should provide the basic engineering that you need. Being able to also generate drawings and user/service manuals, document designs, provide data analytics, integrate robotics and vision systems into an automated solution, provide training to in-house or end customer personnel, provide process optimization services, monitor and control equipment, convert drawings from one system to another, replace one vendor’s outdated items with newer or even a different company’s products can vastly increase your growth.
You plant seeds in good soil. You water them and give them the attention and effort that is needed for their growth. But if you don’t start with good seed…