Key Findings of the Study

• Wipro and HCL are the overall leaders in the ER&D and PES segment; followed by iGate, Infosys, Tech Mahindra & Mahindra Satyam and MindTree
• Though Wipro and HCL are leaders with overall capabilities, companies like Aricent, iGate, Infotech Enterprises,  L&T IES, Symphony Teleca and Persistent, establish themselves as leaders in specific industry verticals
•  China based Vanceinfo and EPAM Systems from CEE region, have significant capabilities in the ISV - Enterprise Software vertical and are clearly in the leadership zone
• Overall Indian ER&D and PES services market is USD 14.78 Bn as of FY 2012, representing an overall growth of 13 percent
• Over FY 2011, the MNC Captive Centers grew by 11 percent whilst the Service Providers grew by 16 percent
• Telecom and ISV verticals constitute almost 50% of the total Indian ER&D and PES revenues

 

 

Bengaluru, July 11, 2012: Zinnov Management Consulting, a leading Globalization and Market Expansion Advisory  firm, today launched its much awaited Rating of Global R&D Service Providers’ across various geographies like India, China, Russia and Eastern Europe. The study titled “Global R&D Service Providers (GSPR) Rating 2012”,  is an annual study undertaken by Zinnov to assist business leaders in spearheading global engineering initiatives and enable them make right decisions in partner selection across geographies.

According to the Study, Wipro and HCL are the leaders in the overall rating. While Wipro has a mature practice, HCL has grown significantly over the last two years. iGate, Infosys, Tech Mahindra & Mahindra Satyam and MindTree are some of the other established players with expansive vertical coverage. The R&D and PES service provider space is unique – with significant number of companies with niche capabilities. These companies are hyper-specialized either across a vertical or a service line. Some of the top established and niche players are Infotech Enterprises and L&T IES in Engineering Services, Aricent and Sasken in Telecom, Quest Global in Aerospace, Vanceinfo, EPAM systems, Symphony – Teleca and Persistent in the ISV segment.

•      The top six players constitute close to 60% of the total R&D service provider market, the study highlights. All 48 participating companies have been assessed on parameters like Human capital, product development capabilities, financials, ecosystem linkages, infrastructure & innovation / IP creation. While HCL and Wipro are leaders with overall capabilities, companies like Aricent, iGate, Infotech Enterprises,  L&T IES, Symphony Teleca, Persistent, establish themselves as leaders in specific industry verticals.

 

Commenting on the study, Pari Natarajan, Co-Founder & CEO, Zinnov, said, “We see that service providers are building deep capabilities in specific areas like product conceptualization and user experience design, which are some of the critical capabilities needed in driving Industry transforming innovation for their customers.”

The study also brings to light that of all the offshored R&D outsourcing work done in India, about 63% of the work is delivered by the MNC Captive Centers.

Vertical Wise Revenues FY 2012 (Million USD)   Telecommunications 2,758 Software + ISVs 4,589 Aerospace 659 Consumer Electronics 819 Semiconductors 1,675 Automotive 1,238 Healthcare 409 Computer Peripherals & Storage 1,002 Others (Industrial/Industrial Automation, Construction, Energy, Heavy Machinery) 1,390

The study goes on to highlight that service providers are building deep expertise through centers of excellence and investing in customer labs and industry research in order to move up the PDLC value chain. For example Wipro, HCL, Boeing and IISc have created a consortium called Aerospace Network Research Consortium (ANRC) -  another case in point is the joint initiative between Imec and Wipro, called Applied Research in Intelligent Systems Engineering (ARISE).

Commenting on this specific trend, Sundararaman Viswanathan, Manager-Consulting, Zinnov, said, “We are seeing an increased trend of re-organization of services and verticals within the service providers. The service providers are taking a hyper-specialization approach. Segments like Industrial Automation and Healthcare (Medical Devices) are catered to by specialist service providers.”

 

 

 

 

 

 

 

 

 

 

 

 

With the release of the study this year, Zinnov also introduces the first-ever framework for classifying the Service Providers based on their capabilities and vertical coverage. The framework provides a dashboard view of the service providers across four quadrants Established, Emerging, Niche and Expansive. This is a unique representation because, it brings to light some of the niche service providers who otherwise typically get buried in the headcount / revenue based ratings.

About Zinnov Management Consulting

 

Founded in 2002, Zinnov – meaning Zeal in Innovation – is a leading management consulting company providing advisory services in the area of Global Sourcing, Emerging Markets Expansion and Human Capital Optimization to Fortune 1000 and reputed SMB companies. Zinnov works collectively with clients to tackle prevailing organizational challenges by analyzing the changing dynamics, improving performance, and building institutional capability. The services delivered to its clients through advanced reasoning and analytical techniques, provides solutions that help in integrating organizational vision, business definition and processes.