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SmartFactory Industrie 4.0

Smart products and factories transforming engineering services industry

November 19, 2018 by Sam Francis

The rapid growth of smart products and smart factories is transforming the engineering services industry as never before, and providers are responding by digitalizing virtually every facet of their services portfolio, according to a new study from Information Services Group, a global technology research and advisory firm.

The latest ISG Provider Lens Quadrant report, the first ever by ISG to evaluate engineering services providers serving the US market, notes providers are moving to address the digital elements of core engineering functions – from concept and physical product development, to optimization of industrial design and operations, to software product and applications software development.

Esteban Herrera, partner and global head of ISG Research, says: “Transforming from a traditional to an agile business environment is key. 

“Rapid technology changes in both products and processes, combined with newer business models that focus on design thinking and putting the customer first, are forcing enterprises and their engineering services providers to pursue greater agility in designing, manufacturing and servicing their products.

“Mergers, acquisitions and partnerships along the value chain are becoming necessary for providers that want to offer end-to-end solutions to their customers.”

The ISG report says the product development discipline is being rewritten by technological innovation, notably as more sensors and computing capability are being infused in modern products.

Manufacturing and plant process engineering services, likewise, are becoming more connected and intelligent as factories are optimized through the application of Internet of Things within Industry 4.0 environments.

The engineering ecosystem, overall, is increasingly inclined toward software development and services, the report noted. IoT software applications for connectivity, mobility, predictive maintenance, operational technology, data analytics and digital supply chain are transforming software requirements.

IT-OT integration is becoming increasingly important as enterprises seek to enhance business and technology synergies.

Business and revenue models also are being transformed by the new realities of the engineering services market. Traditional time and materials and fixed-priced/project-based models are giving way to managed services, risk-reward and outcome-based models.

The ISG report includes detailed analysis of engineering services in industries significantly impacted by digitalization: automotive; chemical, oil and gas; life sciences and consumer packaged goods.

The automotive sector is being transformed by the movement toward autonomous vehicles and the growing connected car ecosystem. Amid that increased connectivity, security is becoming a greater concern.

Providers are seeking ways to optimize the entire industry, from product to process to marketing strategy to consumer engagement. Engineering services are focused on reducing time to market, lowering CO2 emissions, increasing safety and lowering insurance costs.

In the chemical, oil and gas sector, engineering services are focused on optimizing efficiency and lowering costs, especially in the face of shifting energy demands and fluctuating oil prices.

That includes reducing waste, retro-fitting equipment to better monitor performance and improve outcomes and addressing environmental and safety hazards. The use of IoT and advanced analytics are especially important in this industry.

In life sciences, engineering services providers are challenged by changing cost and reimbursement models, regulatory compliance, and the growing need for secure and better-connected ecosystems for caregivers and patients.

In the consumer packaged goods sector, engineering services are helping manufacturers and retailers improve supply chain efficiencies, meet local market demands, and deliver enhanced product innovation and safety.

The ISG Provider Lens Engineering Services Quadrant Report evaluates 15 providers serving the US market across seven quadrants, three geared to the Automotive Sector: Product Engineering; Manufacturing and Plant/Process Engineering; and Software/Digital and Platform Engineering; and two – Manufacturing and Plant/Process Engineering and Software/Digital and Platform Engineering – geared to each of the Chemical, Oil and Gas and the combined Life Sciences and CPG Sectors.

Only one engineering services provider, TCS, was named a leader across all seven quadrants. Infosys and L&T Technology Services were named a leader in six of the seven quadrants and a rising star in the other. A custom version of the report is available from L&T Technology Services.

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Filed Under: Features, Manufacturing Tagged With: industry 4.0, information services group, isg, smart factories, smart products

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