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.
# # #
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
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