Table of Contents
Engineering firms are constantly under pressure to deliver exceptional client results while optimizing operations and expanding their technical capabilities. Outsourced engineering services have emerged as a strategic solution to achieve these goals.
Third-party engineering services are a form of business process outsourcing (BPO) that allows firms to tap into a network of external engineering experts to tackle specific project aspects.
This article examines the top reasons why you should outsource engineering services. Keep reading to learn actionable insights!
Beyond BPO: Understanding outsourced engineering services
First, what is BPO? This strategy entails delegating non-core business functions or repetitive back-office tasks, such as accounting, data entry, customer service, or human resources, to external service providers.
Outsourced engineering services are BPO solutions for architecture and engineering. They involve engaging external experts for technical and non-physical engineering tasks such as designing, testing, system integration, and prototyping.
As companies prioritize cutting-edge technologies, they seek embedded engineering solutions rather than traditional core engineering services. Hence, they outsource to capable firms.
Why outsourcing engineering services is a strategic decision
Outsourced engineering services provide companies access to specialized engineering expertise and technologies that might not be readily available in-house. They also reduce operating costs and enhance efficiency by freeing internal resources to focus on core activities.
Imagine your firm winning a project that requires expertise in a specific software or a unique engineering domain. Developing this knowledge in-house can be costly and time-consuming. It involves training employees, acquiring new resources, and potentially disrupting existing workflows.
BPO enables you to partner with a team of pre-vetted engineers with the exact skillset needed for the project. It empowers you to compete for and win more diverse projects while ensuring the highest level of technical expertise and top-notch execution.
This focus on specialized technical expertise is a crucial reason the global engineering services outsourcing market is projected to achieve a 29.10% compound annual growth rate (CAGR) from 2021 to 2028. Zion Market Research predicts the sector will reach $5.18 billion by the end of 2030.
Keep reading to learn the top reasons why engineering firms increasingly adopt outsourcing as a strategic outsourcing decision.
1. Global talent pool
The U.S. talent market, despite the country’s technological prowess, faces challenges that make it difficult for businesses to hire top-tier engineers. These difficulties prompt companies to outsource engineering services.
Attracting and keeping top talent is challenging due to intense competition for talented engineering graduates and the increasing skills gap, particularly in specialized industries such as artificial intelligence (AI), cybersecurity, and machine learning (ML). Meanwhile, companies seeking to hire local talent need to consider the rising cost of living and salaries.
Hiring local engineering talent can be challenging because expensive and tedious licensing processes might deter potential candidates. Smaller businesses often struggle to compete with larger corporations for local talent, while some required skills or technologies may not be available domestically, forcing companies to seek talent elsewhere.
One of outsourcing’s most significant advantages is its ability to provide access to a global talent pool of highly skilled engineers. Geographical boundaries are a thing of the past. The world is now more interconnected, with HP, IBM, and other top international companies outsourcing their services to countries such as Brazil and the Philippines, the world’s outsourcing capital.
By outsourcing engineering services, firms can hire engineers with expertise in disciplines that might be scarce locally. They can fill critical skill gaps within their existing teams and tackle complex projects requiring specialized knowledge.
2. Faster project delivery
Time to market is crucial, and the pressure to deliver innovative products quickly is intense. Outsourcing key engineering tasks can significantly accelerate your project timelines. Here are the top services to consider:
- Mechanical engineering. Turn ideas into reality faster by outsourcing CAD modeling, product design, and prototyping, leading to efficient manufacturing and quicker launches.
- Civil engineering. Offload tasks and boost efficiency by outsourcing structural analysis, infrastructure development, and site planning. Free up the team and accelerate project delivery.
- Electrical engineering. Gain expertise and reduce costs by outsourcing power system design. This approach translates to improved project efficiency, faster completion, and more cost-effective services.
- Geotechnical engineering. Build a solid foundation for faster project completion by outsourcing geotechnical engineers to analyze soil, rock, and groundwater conditions. This crucial step minimizes risks, delays, and rework during construction.
- Data engineering. Unlock data insights quickly by outsourcing the design of data pipelines, managing storage, and preparing data for analysis. Gain valuable insights faster to inform decision-making and accelerate product development.
- CAD design. Streamline design and communication by outsourcing CAD designers for detailed 2D/3D models, enabling faster design iterations and improved communication with manufacturing.
- Software engineering. Improve time to market with third-party software engineers handling coding, testing, and deployment. Your internal team can focus on core functionalities, streamlining development cycles.
Faster turnaround translates to quicker project delivery that creates good business, a competitive edge in the marketplace, and a solid reputation as a reliable engineering firm.
3. Enhanced project flexibility and scalability
Flexibility is critical for engineering firms navigating an ever-evolving landscape. They must be able to efficiently adopt new technologies, meet changing client demands, and comply with updated industry regulations.
Third-party engineering services can scale the engineering workforce based on project requirements. This is particularly advantageous for projects with fluctuating workloads or those requiring specific skill sets for a limited duration.
Imagine your company is developing electric vehicles. During the critical battery design phase, a large number of specialized electrical engineers are required. Outsourcing this phase can result in cost savings, faster project completion, and access to specialized expertise.
By strategically utilizing outsourcing, Companies can meet the demands of complicated projects and efficiently manage their engineering resources by strategically leveraging outsourcing.
4. Optimized operating costs
While building a robust in-house engineering team can be tempting, the cost-benefit analysis of outsourcing makes it a more sustainable and cost-effective approach in the long term. Here’s why:
- Reduced overhead. Internal teams require significant investments even during periods with lower project volumes. BPO eliminates expenses in infrastructure, engineering software licenses, employee training, office space, and ongoing equipment maintenance. BPO eliminates these expenses.
- Lower labor costs. Outsourcing partners often operate in regions with lower labor costs, reducing overall project expenses. For example, an IT engineer in the U.S. earns about $6,036 per month, while in the Philippines, the average monthly salary is only about P40,680 or around $695.
- Streamlined operations. Outsourcing partners typically handle project management, quality control, and CAD operation. This frees up your internal team, reduces operational costs, and improves overall project efficiency.
Outsourcing offers a clear advantage by considering the total cost of ownership: it frees up your valuable resources. You may reallocate these resources to business development activities, client relationship management, or team upskilling initiatives.
5. Focus on core business activities
Outsourcing engineering services allows firms to dedicate their internal resources to core competencies. By delegating non-core tasks, engineering firms can free up their internal talent to focus on strategic initiatives that drive innovation and propel business growth.
This approach fosters a more specialized and efficient internal team, allowing members to dedicate their expertise to solving the most complex engineering challenges.
Imagine your core staff focusing on developing innovative design solutions while a third-party team handles detailed engineering tasks. This streamlines project execution while empowering your in-house talent to hone their skills and contribute to cutting-edge solutions for your clients.
Mitigating risks in outsourcing engineering services
While outsourcing offers numerous benefits, careful partner selection is crucial. A thorough process considering expertise, track record, communication, and security protocols is essential. Strategic partnerships can reduce risks and ensure a positive experience.
Here’s a breakdown of the potential risks of third-party engineering services and their mitigation strategies:
| Communication challenges | |
|---|---|
|
|
| Intellectual property (IP) concerns | |
|
|
| Quality control issues | |
|
|
| Integration challenges | |
|
|
| Vendor management challenges | |
|
|
By prioritizing clear communication, robust security protocols, and a proven track record of high-quality work when choosing an outsourcing partner, businesses can more confidently leverage outsourcing’s numerous benefits.
The bottom line
Outsourcing engineering services is a deliberate move that can significantly increase a company’s technical capacity rather than just being a cost-cutting tactic. By leveraging a global talent pool, increasing project flexibility, and reducing operating costs, BPO allows companies to complete projects, innovate services, and maintain competitiveness.
Start optimizing your engineering processes and unlock the full potential of your projects by exploring BPO’s possibilities. Let’s connect if you want to discuss third-party engineering services or are interested in other outsourcing solutions. Unity Communications can provide the expertise and resources you need to boost your operations and drive your growth.
