III Information Services Group Inc

Growing interest in connected car technology and autonomous driving in the United States, the most advanced market for these offerings, is driving strong demand for engineering services, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

 

The 2019-2020 ISG Provider Lens™ Engineering – Service Partners Report for the U.S. finds the advanced autonomous vehicle industry in the U.S. being driven by new partnerships between automotive original equipment manufacturers (OEMs) and engineering outsourcing providers.

 

Vehicle OEMs and product engineering services providers are entering into long-term, outcome-based alliances focused on shared risk and reward, with the goal of delivering greater innovation in such areas as telematics, powertrain and autonomous driving.

 

As part of smart city infrastructure, providers also are focused on electric mobility solutions, including battery systems and charging stations for the personal and public transit markets, the report says. OEMs are also embracing engineering R&D providers to develop advanced driver assistance systems.

 

IT services providers are focused on leveraging their in-house software capabilities to address customer needs in connected and autonomous vehicle development, the report adds. Providers are also partnering with academia to develop new sensor technologies, 3D mapping and software integration capabilities.

 

“Engineering and R&D services are one of the fastest growing segments in the outsourcing market,” said Jan Erik Aase, director and global leader, ISG Provider Lens Research. “This is especially true in the U.S. where automotive OEMs are partnering with technology suppliers, telcos, cloud providers and IT services firms to create a new generation of autonomous driving technologies.”

 

Meanwhile, the U.S. aerospace OEM industry is focused on the so-called “more electric aircraft” (MEA) movement, which is working to replace mechanical and hydraulic systems with electrical ones, the report says. OEMs are working with product engineering providers to find replacements for heavy power electronics boxes. They are also focused on “light-weighting” aircraft by using composite materials for airframes and other components.

 

Aerospace OEMs are looking for end-to-end transformational outsourcing partners and are moving away from typical labor-arbitrage-driven outsourcing models, the report adds. OEMs are seeking outcome-based pricing models that encourage innovation and reduce time to market.

 

In the aerospace manufacturing engineering space, OEMs are leaning on service providers to bolster their manufacturing capabilities, the report says. OEMs have been focused on component sourcing for cost advantage, but component manufacturers have been increasing prices.

 

As a result, service providers are in a good position to cater to OEMs, the report adds. To increase their in-house manufacturing capabilities, many OEMs would have to build up their workforces and integrate new divisions into their organizations.

 

The 2019-2020 ISG Provider Lens™ Engineering – Service Partners Report for the U.S. evaluates the capabilities of 34 providers across four quadrants: Automotive – Product (Design, Development and Pilot) Engineering, Automotive – Manufacturing Engineering, Aerospace – Product Engineering and Aerospace – Manufacturing Engineering.

 

The report names Capgemini, HCL, Infosys, L&T Technology Services (LTTS) and TCS as leaders in all four quadrants, and QuEST Global as a leader in three. Altran, Cyient and Wipro are named as leaders in two quadrants, and KPIT and Tech Mahindra are named leaders in one.

 

The 2019-2020 ISG Provider Lens™ Engineering – Service Partners Report for the U.S. is available to ISG Insights™ subscribers or for one-time purchase on this webpage.

 

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe and Latin America, as well as in the U.S., Germany, the U.K., the Nordics and Brazil, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

 

The series is a complement to the ISG Provider Lens Archetype reports, which offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.

 

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 70 of the top 100 enterprises in the world, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

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Will Thoretz
Information Services Group, Inc. 
+1 203 517 3119
Will.Thoretz@isg-one.com

Jim Baptiste
Matter Communications for ISG
+1 978 518 4527
jbaptiste@matternow.com