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Friday, February 11, 2005

India -Value Added Services : Now Its Aerospace Offshoring

India's aerospace industry aims to take a page out of the IT sector's book by promoting itself as a potential offshoring base for foreign companies,-There is tremendous scope for outsourcing from India in areas where the companies are competitive. State owned HAL now makes aircraft doors for Airbus, part of Europe's EADS, and is set to produce 44 of the 66 Hawk trainer jets New Delhi is buying from Britain's BAE Systems under a joint programme. BAE also has a software joint venture with HAL.
India had the capability to make advanced alloys, process technologies and aircraft equipment,and the industry was considering diversifying into making civil aircraft.
Lockheed Martin Corp signed on Wednesday a technical agreement with HAL to share data on its P-3 Orion surveillance aircraft. India is considering buying F-16 fighter jets from Lockheed Martin. "We are confident that integration of Indian industry such as HAL into our worldwide supplier base will enhance the attractiveness of our products to the government of India," said Dennys Plessas, regional vice-president in Lockheed's aeronautics unit.
On Tuesday, Boeing signed up Indian software firm HCL Technologies to develop a hosting platform for the flight test system for its new 787 Dreamliner aircraft
. France's Snecma, set to be taken over by Sagem, said it planned a 50-50 joint venture with HAL to make engine parts, investing an initial 300 million rupees ($7 million

We recently covered in our blog AMRResearch's India Inc growing twice as fast as Japan Inc wherein we also covered G.B.Prabhat's view Across every industry spectrum, there is potential for knowledge work to relocate to India. We also covered recently India Inc.’s Future:More High-Value Services Beyond Technology Roots wherein we referred to AMRresearch saying India Inc. is aggressively expanding its higher-value services—proof points exist in business application innovations,product development, and BPO.
Not content to rely on the package of services currently offered to fuel future growth, the Indian outsourcing companies are expanding existing customer relationships by adding higher value services. The examples seen span innovative business application development, product engineering, and professional BPO services.
-HCL Technologies developed FDA-compliant systems for a medical diagnostic device manufacturer. HCL is also providing hardware and software to the Boeing 787.
-Infosys developed the embedded systems used to control an on-car navigation and entertainment system. The system is deployed in cars built by a North American OEM.
-Satyam developed the embedded system that controls automobile steering systems for a Tier 1 automotive supplier. The system is used in cars manufactured by leading German OEMs.
-TCS developed a modeling package used by an aircraft component manufacturer to test the strength of composite materials. The package was used to reduce the weight of the component by 20%.

No doubt services - atleast low end - tehcnology and processes are moving towards getting developed in India - only a trickle has started as we noted only two Indian offshore providers to receive multiple mentions as strong application development and integration brands. No offshore provider received more than one mention as a preferredprovider, while 44.7 percent of participants indicated they maintained a preferred provider list for application development and integration. Further Gartner's data show that the leader of the pack IBM has a marketshare less than 8% marketshare in the entire IT services market and that the marketshare of India headquartered vendors at )2003 data)like Infosys stood at 0.8%,TCS at 0.7% and Wipro, Satyam and Cognizant hovering between 0.5% to 0.6%. This makes Ed Frauenheim'sargument look specious and reminds Indian IT industry remind itself that there is humongous opportunity and market to be captured.

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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
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