'Indian tech firms must focus on joint product development'

Friday, 12 December 2003, 20:30 IST
Printer Print Email Email
NEW DELHI: Collaborative product development market is emerging as a major opportunity for India's money spinning outsourcing companies, says the country's premier IT industry lobby group. Although in its infancy, the market is likely to see rapid growth in the years ahead as it results in "massive savings and efficiency gains" for manufacturers, says the National Association of Software and Service Companies (Nasscom). "The Internet has made it possible to cut costs by 50 percent or more by employing outsourcers in jurisdictions with low labour costs," said a Nasscom study report made available to IANS. The success of collaborative engineering practices between domestic and offshore partners, to compress product development time reduce costs by leveraging available resources worldwide, are being examined closely by global customers, it said. "It is being acknowledged today that massive savings and efficiency gains are possible through collaborative product development provided manufacturers choose relevant off-shoring partners," said the report. India's vast pool of English-speaking and cheap manpower, educational system and training programmes have helped transform the country into a global outsourcing superpower. The rapidly growing business process outsourcing (BPO) industry has virtually turned the country into an electronic housekeeper to the world, taking care of a host of routine activities for multinational giants. More than a quarter of Fortune 500 companies like General Electric, American Express, British Airways, HSBC and Citibank are shifting their back office operations to India. Experts say having made a global impact in the services arena by building strong domain knowledge and brand equity over last few years, Indian outsourcing firms must embark on product development and high-end research activities. According to an industry study, the product and technology services' segment is set to grow phenomenally in the next five years to achieve revenues to the tune of $8-11 billion by end of 2008. According to the Nasscom report, collaborative product development services can also help manufacturers shorten time to market due to the offshore product developers' ability to reduce the number of errors. "Outsourced collaborative product development suppliers can help clients manage utilisation and reuse design work or parts and shorten review cycles," it said. "Collaborative product development can help firms manage, control and facilitate alliance on product designs and data from the conception of a new product idea to the point when the product is handed off from engineering to manufacturing." The lobby group said other advantages of collaborative product development include reduction in production related travel expenses, and reduction in errors in the manufacturing process.
Source: IANS